MT - ArcelorMittal Stock: Much Improved And Undervalued But Sentiment Is Key To Another Run

• ArcelorMittal has logged some truly impressive quarterly EBITDA numbers as restrained capacity behavior from steel companies has kept prices much higher for much longer.
• Management is building real credibility on the "it's different this time" story, with sensible capex (value-added capabilities and decarbonization), deleveraging, and large potential capital returns to shareholders.
• Delayed auto production and strong backlogs in steel-consuming industries should push the plateau into 2022, and management is doing more to highlight the value of its JV operations.
• I can argue for a fair value from the mid-$30s to the mid-$40s, but sentiment is a key risk as the market is unlikely to embrace the stock once steel prices and margins start shrinking.

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