Steel stocks fall after Jp Morgan downgrade. Tensions in the Middle East weigh heavily
Industrial metals prices, which have remained largely unchanged since the beginning of the war in the Middle East, are expected to fall. According to the investment bank, shares of mining and steel groups could fall another 10%
(Il Sole 24 Ore Radiocor) - Heavy steel on the European stock exchanges, due to the downgrading of the stocks of the main companies in the sector by Jp Morgan. Austria's Voestalpine was the main culprit, dropping about nine points, extending last week's losses (-18% in five sessions) and finishing at the bottom of the Stoxx Europe 600 index. But there were also massive sell-offs on Arcelor Mittal (-6.5%) and Aperam (-6.6%) on the Amsterdam Stock Exchange and Thyssenkrupp (-4.4%) in Frankfurt.
JP Morgan downgraded its recommendations on shares of major European steel companies because it expects industrial metals prices, which have remained largely unchanged since the start of the war in the Middle East, to fall. According to the investment bank, shares of mining and steel groups could fall another 10%, after their European benchmark index fell 9% last week.
As a result, analysts at Jp Morgan have lowered their recommendation on both Voestalpine and ArcelorMittal shares by two levels, from 'Overweight' to 'Underweight'. In the case of Voestalpine the price target was reduced from EUR 50 to EUR 36.20, while for ArcelorMittal the target price fell from EUR 53.50 to EUR 40. In the case of Aperam, the downgrade was from 'Overweight' to 'Neutral', with the target price reduced from EUR 45.10 to EUR 40.70. Finally, JP Morgan confirmed its 'Neutral' recommendation on Thyssenkrupp with a price target of EUR 10.10, but this was not enough to shield the stock from selling.
