JP Morgan Stays Neutral on ArcelorMittal (MT) Amid Uncertainty

On Tuesday, May 27, JP Morgan analyst Dominic O’Kane maintained a Neutral rating on ArcelorMittal S.A. (NYSE:MT) with an unchanged price target of €30.5. His stance reflects the mixed implications of a potential deal between Nippon Steel (OTC:NPSCY) and United States Steel (NYSE:X), which recently received support from President Trump.

On the positive side, O’Kane believes the transaction could significantly benefit ArcelorMittal. He pointed to an October 2024 agreement between ArcelorMittal and Nippon Steel regarding their 50/50 joint venture for the Calvert mill. Under the agreement, ArcelorMittal would have the right to acquire Nippon’s 50% stake in the mill for just $1. In exchange, Nippon would inject capital and forgive approximately $900 million in partner loans. The Calvert mill is a strategic asset in the U.S. flat steel market, and its ownership will provide ArcelorMittal with a potential competitive edge.

A machinist inspecting a freshly-cut steel beam, ready to be shipped to its intended destination.

However, the analyst notes that, according to the Calvert agreement terms, this benefit depends entirely on Nippon completing its acquisition of U.S. Steel; otherwise, the JV will continue. The acquisition by Nippon has not yet been confirmed and may ultimately take the form of a partnership rather than a complete takeover. This adds uncertainty to the transaction and its financial benefits to ArcelorMittal.

Additionally, tariff-related supply chain exposure remains a structural risk for ArcelorMittal. Therefore, the analyst maintained a cautious stance on the stock.

ArcelorMittal is one of the world’s leading integrated steel and mining companies, the largest steel producer in Europe, and among the largest in the Americas.

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Disclosure: None.