ArcelorMittal Shares Drop 3.28% Following Santander Downgrade
The stock of the Luxembourg-based steelmaker experienced a significant correction this Friday, dropping 3.28% to 50.08 euros in a pressured European market environment. The recent downgrade by Grupo Santander and the surge in oil prices are weighing on the group's dynamics, just days before the publication of its quarterly results.
Impact of Santander's Recommendation and Rising Energy Prices
The decline in ArcelorMittal SA shares comes two days after Grupo Santander's decision to lower its recommendation from 'outperform' to 'neutral', while also reducing its price target from 55.00 to 52.70 euros. This cautious signal sets the target just above the current price, implying a limited potential of about 5%. Moreover, the sharp increase in energy prices is an unfavorable factor for the steel industry, a major consumer of electricity and gas. Brent crude, having crossed the $106 per barrel mark due to military tensions in the Strait of Hormuz, increases the energy costs for manufacturers. This price hike acts as an additional production cost for steel mills, in an environment where inflationary fears could delay the monetary easing by central banks. The CAC 40 is down 1.05% in the session, while the SBF 120 drops 1.00%, illustrating a generalized retreat in cyclical stocks. Fundamentally, ArcelorMittal published its 2025 sustainable development report on April 23, reporting a 47.7% reduction in its absolute CO? emissions and an improvement in safety indicators, although this announcement was not enough to support the stock price.
Technical Analysis and Upcoming Earnings Report
From a technical standpoint, the Relative Strength Index (RSI) stands at 34, close to the conventionally set oversold zone of 30, indicating sustained selling pressure in the short term. The 50-day moving average, positioned at 48.39 euros, remains below the current price, but the gap has narrowed significantly after today's decline, signaling a weakening of the medium-term upward trend. Despite this correction, the stock's annual performance remains impressive, with a surge of 96.62% over twelve months and a gain of 8.94% over three months. The next catalyst is the publication of the first quarter 2026 results, scheduled for April 30. This event will be crucial to assess the impact of energy costs and the global steel industry environment on the group's margins. The major technical resistance is at 56.92 euros, more than 13% above the current price, while the support is established at 42.01 euros.
