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ArcelorMittal Announces Share Buyback Program Worth $280M


ArcelorMittal MT announced a share buyback program, which was authorized during the annual general meeting of shareholders held on May 5, 2015.

The key objective of the program is to acquire shares to meet the company’s obligations arising from share option programs or other allocations of shares to members of management, including the CEO or employees or group companies.

The company plans to repurchase for a total amount of $280 million, which is the maximum amount allocated to the program in accordance with the resolution of the meeting and applicable market abuse regulations. Moreover, the number of shares to be acquired under the program should be up to 7 million shares over a period starting from Mar 13, 2018 to May 5, 2020.

Shares of ArcelorMittal have declined 6.1% in the past three months, underperforming the industry’s 13% growth.

ArcelorMittal stated during fourth-quarter earnings call that the market conditions are favorable and demand environment remains positive along with healthy steel spreads. The company expects global apparent steel consumption (ASC) to grow in the range of 1.5-2.5% in 2018.

In the United States, the company expects ASC growth of 1.5-2.5% in the year, factoring in higher construction and machinery demand. The company also anticipates 1-2% growth in ASC in Europe. Moreover, ASC is forecasted to rise around 6.5-7.5% in Brazil as the economy is expected to turnaround with improved consumer confidence as construction recovers.

ASC in China increased 3.5% in 2017 and is expected to remain close to this level this year as weakness in the real estate sector to be partly offset by strong infrastructure and automotive end markets.

ArcelorMittal Price and Consensus

ArcelorMittal Price and Consensus | ArcelorMittal Quote

Zacks Rank & Stocks to Consider

ArcelorMittal currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF, LyondellBasell Industries N.V. LYB and Kronos Worldwide Inc KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 8%. Its shares have soared 22.8% over the last six months.

LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have gained 15.9% over the past six months.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have moved up 9.8% over the last six months.

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