Steel sector in the Ibex 35, will better times come?

Its cyclical component, the economic deterioration with lower demand and the dizzying prices of electricity make up the panorama that could be seen as headwinds or almost a perfect storm for what is coming. But the truth is that Acerinox, for example, It has just presented the best results in its history in the first nine months of the year.

Both with ERTEs under their arms that will last until 2023 and many uncertainties ahead. In the purely stock market, both have lost positions so far this year in terms of amount, but are recovering levels, more than 8% Acerinox in October and almost 10% ArcelorMittal

Arcelor annual stock price

In the case of Arcelor the stock gains positions by more than 2% in the last four listed weeks, while, in the month of October it advances almost 10%. However, it maintains its annual falls that already exceed 19.5%, and in Acerinox, the profits of the last month exceed 8% and 2.6% in the last 20 trading sessions. On its annual path, its cuts exceed 16.3%.

Acerinox annual stock price

Acerinox presented resultsas we say the best in its history in that period, until September, with a profit of 741 million euros in the first nine months of the year, while expecting the group’s main market, the United States, to maintain a better performance in the coming months, although punished in Europe by the war in Ukraine, the energy crisis and the consequences of the community industry. ArcelorMittal will present results on November 10.

Regarding the latest recommendations, in the case of Acerinox they go through the 12.2 euros set by JBCapital with a purchase recommendation, compared to the 11 euros per share that Jefferies marks, after lowering its PO by one euro, although it maintains the purchase advice on the value.

From JPMorgan they lower it to 10.20 from the previous 10.50 euros. At Bankinter, the target price and the board are under review after the results and, from Renta 4, the increase in its dividend stands out, 20% compared to 21 while overweight the value with PO of 15.1 euros per share and potential of 68%.

Already from Arcelormittal, pending the results, from Citi they see the steel company with its target price lowered to 43 euros from the previous 50, although they continue to bet on their advice to buy the value in the market. Its current potential reaches 88%. In the case of Jefferies, the reduction is also pronounced and to a lower level in its PO that is cut to 33 euros from the previous 38. His analyst, Alan Spence, adjusts his estimates for the sector and the value in particular downwards

From a technical point of view, for the market analyst of Investment Strategies José Antonio Gonzálezin ArcelorMittal “the tertiary or short-term bullish rebound gains integers after the Exceeding the area of ​​technical relevance comprised of around €22.47 / €22.205 per shareas well as from the downward guideline that starts at €25.20 per share. In this sense, a potential throwback movement can be seen at the previously proposed levels, which allows us to propose an update of the next bullish targets towards €25.20 per share, a level that is an approximation of its simple moving average of 200 periods or long term”.

ArcelorMittal on weekly (Left) and daily (Right) chart with Average Amplitude Range in percent, MACD oscillator and trading volume

Arcelor value technical analysis

And about Acerinox, José Antonio González highlights that, “Despite the registration of a new annual minimum of €7,938 per share, the accumulation of (1) falling primary supports and (2) the appearance of large secondary positive divergences, invite a buying reaction that avoids further technical deterioration until the next support of €7.108 per share. In the short term, thanks to the overcoming of the bearish guideline that starts from €9,786 and the overcoming of the last decreasing maximum that left us the price at the height of €8.65, the rebound is taking shape towards the next intermediate high of €9.30 per share”.

Acerinox on weekly (Left) and daily (Right) chart with average amplitude range in percentage, MACD oscillator and trading volume

Acerinox technical analysis of value

Already from the technical indicators that Investment Strategies prepares, we see that ArcelorMittal presents an improved business card, with a total score of 3.5 from the point that Acerinox barely reaches out of the 10 to which both can aspire.

In both cases its long-term trend is negative, with both total moments negativehowever, from ArcelorMittal the trend is positive in the medium term, as well as the volume of business in the medium term, something in which both coincide, and its volatility in the medium term is increasingin the face of negativity, on both sides, in the medium and long term, which demonstrates the wide range in Acerinox.

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