Jefferies upgraded its recommendation on stainless steel maker Aperam to "buy" from "hold" on Wednesday, citing a recent derating in the stock's valuation and the prospect of policy-driven earnings support. The news coincided with a near 2% rise in Aperam shares following the brokerage's note.
The firm kept its price target at €47, which represents about a 17% increase relative to the previous trading day's closing price of €40.08. Jefferies' reassessment followed a reduction of one turn in Aperam's enterprise value to EBITDA multiple, a move the analysts linked to geopolitical tensions in the Middle East.
In the note, Jefferies' analysts said that "the recent trade disruption, energy shock, and subsequent share price derating have created an attractive entry point." They observed the company’s valuation had fallen from a high of 7.9x to roughly 6.9x, still above a 10-year average of 5.7x.
Jefferies highlighted a set of European Union policy measures that it expects will materially benefit Aperam's earnings profile. The brokerage estimated up to €200 million of incremental EBITDA stemming from initiatives such as the Carbon Border Adjustment Mechanism (CBAM) and new trade defense tools. Those policies are projected to help pricing and utilization from the second half of 2026, with a possible utilization lift in the range of 7% to 10%.
Beyond policymaking, Aperam is pursuing internal cost and efficiency measures. Management targets €150 million of self-help benefits through its Leadership Journey Phase 6 program over the period 2026 to 2028.
Jefferies' forecast shows EBITDA rising to €484 million for the full year 2026, and further to €650 million in 2027. For the first quarter of 2026, analysts expect EBITDA of €86 million, up from €67 million in the preceding quarter, reflecting seasonal volume recovery in Europe. Jefferies noted this improvement would come despite mid-single-digit million-euro headwinds from higher energy costs.
The firm's analysis also points to geographic diversification in Aperam's footprint, with roughly 80% of EBITDA generated outside Europe. Operations in Brazil are expected to contribute between €75 million and €100 million to 2026 EBITDA, aided by an upgraded hot rolling mill.
Other financial metrics cited include a €2 per share dividend, yielding in excess of 5%, and net debt for 2026 forecast at €867 million, implying a net debt-to-EBITDA ratio of 1.8x.
Summary
Jefferies upgraded Aperam to buy while keeping a €47 target, citing a valuation setback and anticipated benefits from EU policy and company efficiency programs that should lift EBITDA from 2026 onward.
Key points
- Jefferies upgraded Aperam from hold to buy and maintained a €47 price target - about 17% above the prior close.
- EU measures such as CBAM and trade defense could add up to €200 million of EBITDA and support utilization starting H2 2026.
- Aperam aims for €150 million of self-help gains through Leadership Journey Phase 6 (2026-2028); 2026 EBITDA is projected at €484 million and €650 million in 2027.
Risks and uncertainties
- Geopolitical tensions - The one-turn valuation reduction was attributed to geopolitical tensions in the Middle East, which can continue to affect market sentiment and multiples - impacting industrial and materials sectors.
- Energy cost pressure - Higher energy costs pose a headwind in the mid-single-digit million-euro range, which could weigh on margins for steelmakers and energy-intensive manufacturing.
- Execution risk for initiatives - Delivering the targeted €150 million of Leadership Journey Phase 6 gains and realizing EU policy benefits as projected are contingent on operational execution and timing - relevant to Aperam and its competitors in the metals sector.