Jefferies sees 2025 earnings rebound for steelmakers Aperam, Outokumpu

Outokumpu Oyj

30/09/2024 08:29

** Jefferies initiates Aperam  APAM.AS  and Outokumpu
 OUT1V.HE  at "buy", expecting a substantial earnings rebound in
2025 for the two European stainless steel producers
    ** It cites stronger balance sheets, structurally lower
carbon footprints translating to low capital needs for
decarbonisation, cost leadership and lean working capital
management
    ** It also likes their vertical integration, as well as
Aperam's high dividend yield and Outokumpu's share buybacks
    ** The two companies face low pressure from cheap Asian
imports for non-commoditised products, the broker adds
    ** It says companies with exposure to the U.S. - Outokumpu
has an over 20% market share, Aperam 30% - will benefit from a
more protected and stable market supported by government funds
    ** EU mills will also benefit from the implementation of the
bloc's Carbon Border Adjustment Mechanism, aimed at protecting
EU stainless steel products from cheaper and more polluting
Asian imports, it adds
    ** Outokumpu shares are up 1.8%; Aperam rises 4.5% after it
also said it expects Q3 results slightly above those of Q2

($1 = 0.8956 euros)

 (Reporting by Anna Peverieri and Marta Frąckowiak)
 ((Anna.peverieri@thomsonreuters.com;
marta.frackowiak@thomsonreuters.com))