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The cycle continues on Acerinox’s side and the 12% decline that the firm accumulates since the 2006 highs that it achieved two weeks ago has been interpreted by analysts as an opportunity to strengthen positions in the company, with the 90.5% of the experts that cover their listing on the stock market recommending to buy their titles.

The company, which has not been liked by experts so much since 1994, has snatched ArcelorMittal from ArcelorMittal the honor of being the favorite value of the Ibex League of elEconomista, the classification that combines the advice of FactSet and Bloomberg.

a overtaking that occurred on time in mid-September but that the Spanish steelmaker lost in favor of the Luxembourg steel company last March. In fact, between May and June, Acerinox fell to fifth place by recommendation. Six months later, the company chaired by Rafael Miranda is the new leader in the ranking ahead of Arcelor and ACS, which occupy second and third places.

The rebound of steel prices, with five increases since May in the US, where 60% of the group’s income comes from, together with a Increased demand given that China has stopped flooding the world with its massive exports It is helping to make the steelmaker’s price even more attractive, which stands at 19% in 2021, outperforming the European basic resources sector by 7 points in the same period. “In today’s market environment, where Economic recovery and the upturn in inflation are protagonists, our recommendation is to maintain a position in securities linked to the economic cycle, one of these values ​​being Acerinox “, they explain from atl Capital.

atl Capital: “In the current environment, where the economic recovery and the rise in inflation are protagonists, our recommendation is to maintain a position in values ​​linked to the cycle”

The recent presentation of results has also been a turning point for the opinion of analysts about the company. The firm presented solid quarterly accounts on November 3, with a gross profit (ebitda) of 293 million euros, exceeding the consensus expectation by 15%. Numbers that represent a 35% increase in ebitda and an increase of more than 3 times compared to the third quarter of 2020.

How have experts interpreted these results? For Xavier Cebrián, manager of the Bolsa Líder fund of GVC Gaesco, “the strong recovery in global demand has boosted its profits. It is passing on cost inflation to the client, which, together with the efficiency programs carried out in years previous years, it is pushing the profit margin to levels well above its historical average. ”

In the accumulated of the first nine months, Acerinox increased its EBITDA margin to 15% for the stainless division (it currently represents 93% of the group’s income, compared to 7% for VDM Metals)and that of the group up to 14%. The analysts’ forecast is that it will close the year with an EBITDA margin at those same levels, close to 15%.

In the accumulated of the first nine months, Acerinox increased its EBITDA margin to 15% for the stainless division

The manager adds to the trend of those who believe that “it is very likely that they will announce another share buyback program from December given the low levels of debt, which could act as a catalyst,” he adds. The company was linked to an increase in remuneration at levels lower than 1.2 times / ebitda. In any case, the firm recognizes that it is not ruled out that an increase in the cash dividend or an extraordinary one may be chosen, beyond the repurchase of shares. Acerinox increased its dividend to 0.5 euros per share in 2019. Its profitability is currently 4.6%.

Historical profit

This improvement in recommendation in recent months has been accompanied by a progressive improvement in the estimates throughout the current year. At the beginning of January, the consensus forecast a net result of 170 million euros for 2021. That forecast has already doubled for the summer and, now, it reaches 552 million euros, which means pulverizing the historical mark of 503 million that Acerinox achieved in 2006.

What could overshadow these estimates? From Bankinter they emphasize that the only unfavorable aspect is the evolution of energy prices and, specifically, in the plant in Spain, “which leads us to be more cautious in reviewing margins for 2022”. However, in a recent interview with the Economist of its CEO, Bernardo Velázquez, rules out that Algeciras is an impediment to “growth in all markets” this year given the strength of demand, although he did acknowledge that this year “the price of energy in Spain will eat up half of the benefit”.




In this sense, from Bankinter they speak of solid results “with inventories in stainless steel below the average of the last years (with new announcements of price increases); improvement in the demand of sectors of special alloys and a more balanced commercial environment in Europe” thanks to the entry into force of tariff measures to control imports.

A potential of more than 50% a year ahead

The consensus continues to contemplate new all-time highs for Acerinox within a year. Its average target price, at 16.24 euros, gives it a potential upside of 50.6% from current prices, which are 1 euro lower than a fortnight ago. The company presented its results on November 3 and since then its titles have fallen 10%, from 11.92 euros the day before to the current 10.78 at the close of yesterday. Since the beginning rally from a year ago their titles scored 76%.


Bernardo Velázquez (Acerinox): “We consider raising the remuneration, an extra dividend or repurchasing shares”

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