Breaking Down ArcelorMittal S.A. (MT) Financial Health: Key Insights for Investors

If you are looking at ArcelorMittal S.A. (MT) right now, you need to cut through the noise and focus on one simple truth: the company is demonstrating real operational resilience at what management calls the bottom of the cycle. For the third quarter of 2025, they delivered an EBITDA of $1.5 billion, which translates to a strong $111 per tonne margin, showing their asset optimization strategy is working, even with steel shipments at 13.6 million tonnes. Still, the near-term cash flow picture is complex; net debt rose to $9.1 billion by the end of Q3 2025, largely due to a typical seasonal working capital investment of $1.9 billion over the first nine months. But here's the actionable insight: that working capital is expected to unwind in Q4, setting the stage for a strong free cash flow surge that will support their full-year capital expenditure guidance of $4.5-$5.0 billion. The balance sheet is defintely robust, with $11.2 billion in liquidity, but the question for investors is whether strategic growth projects-like the Liberia iron ore expansion-can deliver the projected long-term EBITDA uplift to justify a full-year EPS forecast of around $3.72.

Revenue Analysis

You need to know the core engine of ArcelorMittal S.A. (MT) to value it properly, and the direct takeaway is this: the company is a steel powerhouse, but its top-line revenue is contracting slightly in 2025, driven by market pricing, not volume collapse. The Trailing Twelve Months (TTM) revenue as of September 30, 2025, stood at $61.10 billion, reflecting a year-over-year decline of -1.90%.

The primary revenue stream for ArcelorMittal S.A. is, unsurprisingly, steel products. Specifically, the business is heavily weighted toward its Flat Products segment, which includes materials for automotive, construction, and appliance markets. This is the defintely the most crucial segment to watch.

Here's the quick math on where the money comes from, based on the most recent full-year segment breakdown (2024 data, which provides the structural picture):

• Flat Products: The largest contributor, dominating sales.
• Long Products: Includes rebar and wire rod, essential for infrastructure.
• Mining Products: Iron ore and coal sales, providing a crucial, vertically integrated cost advantage.

To give you a precise breakdown of the product mix, which is key to understanding margin sensitivity, look at the segment contribution. This shows how diversified the risk is across different product cycles:

The year-over-year revenue trend shows a clear headwind. For the first half of 2025 (1H 2025), revenue was $30.7 billion, a 5.6% drop compared to the first half of 2024. This decline is not due to a major drop in shipment volume, which was stable, but rather a 7.5% decrease in average steel selling prices for the period. That's a pricing problem, not a demand one.

A significant change in the revenue stream is the increasing strategic focus on higher-value and lower-carbon steel production, plus the expansion of the Mining segment. For instance, the new 1.5 million tonnes (Mt) electric arc furnace (EAF) at the AM/NS Calvert plant in the US is commissioning in 2025, which will shift some revenue to premium, domestically melted automotive grades. Also, the Liberia iron ore expansion is on track to hit a full 20Mt capacity run-rate by the end of 2025, bolstering the Mining segment's contribution and internal supply chain stability. You can read more about the long-term vision in the Mission Statement, Vision, & Core Values of ArcelorMittal S.A. (MT).

Profitability Metrics

You need to know if ArcelorMittal S.A. (MT) can turn its massive revenue into real profit, especially in a cyclical industry like steel. The short answer is yes, but the margins are thin and volatile, which is typical for a basic materials giant. For the trailing twelve months (TTM) ended June 30, 2025, the company generated a gross profit margin of just over 9.1%, with the net profit margin settling at a modest 4.11%.

Here's the quick math on the TTM gross profit: revenue of $60.634 billion yielded a gross profit of $5.535 billion. This margin is where the company makes its money before all the overhead, interest, and taxes kick in. It shows a tight handle on the Cost of Goods Sold (COGS), but it's still far below the mid-teens margins we saw during the 2021-2022 steel price boom. Honestly, that's the reality of the steel market right now: you have to fight for every basis point.

Margin Trends and Operational Efficiency

When you look at the trend, ArcelorMittal's profitability has been a rollercoaster, which is defintely a key risk for investors. In 2022, the net profit margin was in the double digits, but it dropped significantly in 2023. The good news is that the first half of 2025 shows some stabilization, with net income hitting $2.598 billion on $30.724 billion in revenue, resulting in an 1H 2025 net margin of about 8.5%. Still, the operating margin-which is a cleaner read on core business efficiency-is under pressure. A recent analysis puts the operating margin at a low 2.92%, reflecting the high fixed costs and competitive pricing environment.

Operational efficiency is a constant battle for a company this size, and the gross margin trend is the best indicator of their cost management. The company's strategic growth projects, like the new Electric Arc Furnace (EAF) at Calvert in the US, aim to boost efficiency and shift the product mix toward higher-value steel, which should help margins over time. They are also targeting an additional $2.1 billion in future earnings before interest, taxes, depreciation, and amortization (EBITDA) from these projects, with $0.7 billion expected in 2025 alone.

Benchmarking Against the Industry

To put ArcelorMittal's performance into perspective, you have to compare its ratios to the broader Primary Metal Industries sector. While the company's sheer scale is unmatched, its margins generally lag the industry median, which signals a structural challenge or a more conservative accounting approach. This is why you need to dig deeper than just the headline numbers. You can find a comprehensive breakdown of the company's financial health in our full post: Breaking Down ArcelorMittal S.A. (MT) Financial Health: Key Insights for Investors.

Here is a comparison of key profitability ratios:

The gross margin gap is the biggest red flag; their 9.1% is significantly lower than the industry median of 17.2%. This suggests ArcelorMittal S.A. is either operating older, higher-cost assets, or is facing intense pricing pressure on its core products. The net margin of 4.11% is closer to the industry's 4.7%, but it's still below. What this estimate hides is the impact of one-time gains or losses, like the $0.8 billion in exceptional items that boosted net income in Q2 2025. So, while the net income looks good, the core operational profitability (the operating margin) is the one to watch, and it needs to improve dramatically to match industry peers.

Debt vs. Equity Structure

You want to know how ArcelorMittal S.A. (MT) is funding its operations and growth, and the simple answer is: mostly through equity, which is a sign of financial strength in a cyclical industry like steel. The company maintains a very conservative balance sheet, especially when you compare it to its peers and its own historical leverage.

As of September 2025, ArcelorMittal S.A.'s total debt-which is the sum of its short-term and long-term obligations-is manageable. Specifically, the company reported total long-term debt and capital lease obligations of approximately $10,491 million, plus short-term debt and capital lease obligations of $4,377 million. That gives us a total debt figure of around $14.87 billion. This low debt figure is a deliberate strategy to weather the inevitable downturns in the steel market.

Here's the quick math on the leverage position:

• Total Debt: $14.87 billion ($10,491M + $4,377M)
• Total Stockholders' Equity: $54,603 million
• Debt-to-Equity (D/E) Ratio: 0.27

The Debt-to-Equity (D/E) ratio (a measure of a company's financial leverage) of 0.27 is defintely low. To be fair, steel is a capital-intensive industry, and many peers operate with a D/E ratio closer to 1.0 or higher. For example, some companies in the broader Materials sector can have a D/E ratio up to 1.29, and a competitor like Tata Steel recently reported a D/E of 0.91. ArcelorMittal S.A.'s ratio of 0.27 shows a clear preference for equity funding and retained earnings over external borrowing, which significantly reduces financial risk.

This conservative approach has paid off in the credit markets. In June 2025, S&P Global Ratings upgraded the company's long-term credit rating to 'BBB' from 'BBB-', citing an improved business profile and a stable outlook. Moody's also maintains a respectable long-term rating of Baa3 with a positive outlook. These investment-grade ratings mean the company can borrow money at lower interest rates when it chooses to.

ArcelorMittal S.A. still uses the debt market strategically. In September 2025, the company successfully issued €650 million in notes at a favorable 3.250% interest rate, with a maturity date of September 30, 2030. The proceeds from this issuance are earmarked for general corporate purposes and, crucially, for refinancing existing debt. This is a smart move to optimize interest expense and extend the maturity profile of its debt, enhancing financial flexibility.

The company balances its funding by prioritizing debt reduction and maintaining a strong equity base, using debt primarily for tactical refinancing and growth projects rather than core operations. This capital structure is a key reason why the company can pursue its long-term strategic goals, including its ambitious decarbonization plans. You can read more about those long-term plans here: Mission Statement, Vision, & Core Values of ArcelorMittal S.A. (MT).

Liquidity and Solvency

You want to know if ArcelorMittal S.A. (MT) can cover its short-term bills, and honestly, the picture is mixed. The company has a solid cash buffer, but its reliance on inventory to meet immediate obligations is a clear risk. We need to look past the headline numbers to see the real story.

The core of any liquidity assessment lies in two simple ratios: the current ratio and the quick ratio (or acid-test ratio). The current ratio for ArcelorMittal S.A. (MT) stood at approximately 1.39 as of late 2025, which means it has $1.39 in current assets for every $1.00 in current liabilities. That's defintely adequate short-term coverage.

However, the quick ratio, which strips out inventory-a less liquid asset-tells a more cautious tale. At just 0.58 in November 2025, the quick ratio suggests the company might struggle to cover its immediate liabilities without selling off its steel inventory. This is a common situation for a capital-intensive steel producer, but it's a point of pressure in a volatile market.

Here's the quick math on their short-term position:

Looking at working capital, the first half of 2025 (1H 2025) showed a net investment of $1.5 billion, which is typical for a seasonal business like steel. This investment included a significant seasonal outlay of $1.7 billion in the first quarter (1Q 2025), which then saw a small release of $0.2 billion in the second quarter (2Q 2025). The good news is management anticipates a working capital release in the second half of 2025, which should boost year-end cash flow.

The cash flow statement overview for 1H 2025 shows where the liquidity pressure is coming from. Net cash provided by operating activities (CFO) was $1.1 billion, but this was outpaced by capital expenditure (capex) of $1.9 billion, which includes a focus on strategic growth projects. This combination resulted in a Free Cash Flow (FCF) outflow of $0.8 billion for the half, the first negative FCF in five years. This is a clear signal that growth spending and working capital needs are currently running ahead of operating cash generation.

The financing side reflects this, with net debt rising to $8.3 billion on June 30, 2025, up from $5.1 billion at the end of 2024. Still, the company's total liquidity remains robust at $10.8 billion as of March 31, 2025, split between $5.3 billion in cash and $5.5 billion in available credit lines. This substantial liquidity provides a strong cushion against market headwinds, but the negative FCF trend is something to monitor closely. For a deeper dive into who is betting on this balance sheet, you might want to read Exploring ArcelorMittal S.A. (MT) Investor Profile: Who's Buying and Why?

Key Liquidity Takeaways:

• Current ratio is healthy at 1.39.
• Quick ratio of 0.58 flags inventory reliance.
• 1H 2025 FCF was negative $0.8 billion.
• Total liquidity is a strong $10.8 billion.

The company has the cash to weather a storm, but the negative FCF for the first half of 2025 is a yellow flag that demands a visible improvement in cash generation over the next six months. The market is waiting for the promised second-half working capital release to materialize.

Next Step: Portfolio Manager: Re-run the cash flow projection incorporating a $1.0 billion working capital release in 2H 2025 by end of week.

Valuation Analysis

You're looking at ArcelorMittal S.A. (MT) and trying to figure out if the recent stock surge has pushed it into overvalued territory. The quick answer is no, not yet. The market is still pricing in a significant discount, suggesting the stock is undervalued relative to its peers and historical norms, but the analyst consensus is mixed on the near-term upside.

The stock has had a great run, climbing nearly 49.54% over the last 12 months, closing recently at approximately $39.47 per share. That's a strong move, but the valuation multiples for the 2025 fiscal year still show a steel company priced like a deep value play. The market is defintely rewarding their strategic moves, like the focus on high-value steel and de-carbonization efforts, which you can read more about here: Mission Statement, Vision, & Core Values of ArcelorMittal S.A. (MT).

Is ArcelorMittal S.A. (MT) Overvalued or Undervalued?

When I look at ArcelorMittal S.A.'s core valuation ratios for 2025, the picture is clear. We are looking at a stock that is trading well below the book value of its assets and at a favorable multiple of its expected earnings. This suggests the market is still skeptical about the sustainability of future earnings, or it's simply a classic case of the steel sector trading at a discount.

Here's the quick math on the key multiples for the 2025 fiscal year:

• Price-to-Earnings (P/E): The forward P/E ratio sits at about 8.73x. This is low, especially when compared to the broader market average, signaling that investors are paying less than nine times expected 2025 earnings for each share.
• Price-to-Book (P/B): The forward P/B ratio is a compelling 0.56x. Honestly, trading at less than 60 cents on the dollar for its net assets is a strong indicator of undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): The current EV/EBITDA is around 6.05x. To be fair, this is higher than its 2020-2024 historical average of 3.7x, but still reasonable for a global industrial leader.

Dividend and Analyst Sentiment

The company continues to reward shareholders modestly, which is a good sign of financial health and management confidence. The Trailing Twelve Months (TTM) dividend yield is about 1.18%, based on an annual dividend of approximately $0.47 per share. The payout ratio is very healthy at just 13.91%, meaning they are only distributing a small portion of their earnings as dividends, leaving plenty of capital for growth investments or share buybacks.

Still, the analyst community is generally positive, but with caution. The consensus rating is a 'Buy' or 'Outperform', which is what you want to see. However, the average 12-month price target is approximately $40.83. Since the stock is currently trading around $39.47, that average target suggests a limited near-term upside of only about 3.45%. The range is wide, with a high target of $46.00 and a low of $31.70, showing the market is split on the pace of steel market recovery.

What this estimate hides is the potential for a cyclical upswing in global steel demand, which could easily push those earnings multiples higher. Your action here is to monitor the Q4 2025 earnings release for any upward revisions to 2026 guidance.

Risk Factors

You're looking for the unvarnished truth on ArcelorMittal S.A. (MT)'s financial resilience, and honestly, the picture is one of high-stakes, cyclical risk. The firm is navigating a tough environment where global trade policy and operational execution are the biggest swing factors. Their strategy is sound, but the near-term financial health shows stress points, particularly in liquidity and debt.

The most immediate financial warning sign is the low Altman Z-Score of just 1.36 as of November 2025, which places the company firmly in the distress zone and suggests a higher-than-average risk of financial difficulty within the next two years. Plus, the quick ratio, a measure of immediate liquidity, sits at a tight 0.58, meaning they would struggle to cover all short-term liabilities without selling inventory. That's a classic cyclical pressure point.

External & Market Headwinds: Trade and Overcapacity

The steel industry is all about trade policy, and ArcelorMittal S.A. (MT) is exposed to geopolitical shifts. The European Union is concerned about potential U.S. tariff expansions on EU steel and aluminum, which could disrupt a significant portion of their business. This external uncertainty is compounded by the persistent issue of global overcapacity, especially from China, which is keeping international steel prices low and volatile. In fact, ArcelorMittal S.A. (MT) revised its 2025 global steel demand growth forecast down by 42%, from an initial 3.1% to a more cautious 1.8%, reflecting this growing market anxiety. Exploring ArcelorMittal S.A. (MT) Investor Profile: Who's Buying and Why?

The company is trying to mitigate this with strategic geographic moves, like repositioning production to bypass U.S. tariffs, and they are benefiting from the current U.S. Section 232 tariffs. Still, the stock's beta of 1.28 shows it's more volatile than the broader market, which is a direct reflection of these macro risks.

Operational and Financial Execution Risks

Operational missteps have also cut into earnings. In 2025, operational issues in Mexico alone are expected to have a negative impact of about $200 million on earnings. Furthermore, the company's net debt rose to $9.1 billion in the third quarter of 2025, which is notably above their long-standing target of below $7 billion. This was largely driven by a seasonal working capital investment, which led to a negative free cash flow of $538 million in Q3 2025.

Another strategic risk is the pace of their decarbonization efforts. Despite a planned annual budget of $300-$400 million, only about $100 million was spent in the first half of 2025, creating a significant gap between stated climate ambition and actual capital deployment. This slow pace could expose them to future regulatory penalties or a competitive disadvantage in the rapidly greening European market.

Here's a quick look at the core risks and ArcelorMittal S.A. (MT)'s counter-strategy:

• Liquidity/Debt: Quick ratio of 0.58; Net debt at $9.1 billion.
• Mitigation: Expecting working capital to unwind by year-end; targeting structural EBITDA improvement.
• Operational: $200 million earnings hit from Mexico issues in 2025.
• Mitigation: Commissioning new high-margin assets like the 1.5Mt EAF at AMNS Calvert (US).
• Market: Global demand growth forecast cut to 1.8%; high Chinese exports.
• Mitigation: Leveraging U.S. and EU trade protection; strategic growth projects to add $0.6 billion EBITDA in 2025.

Mitigation and Structural Improvements

To be fair, ArcelorMittal S.A. (MT) is taking clear action to structurally improve its margins, which is the long-term play. They remain on track to capture a $0.7 billion structural EBITDA improvement this year, with an expected medium-term impact of $2.1 billion by 2027. This comes from strategic growth projects like the Liberia iron ore expansion, which is on track to hit a full 20Mt capacity run-rate by the end of 2025. These improvements are designed to make the company less sensitive to the cyclical swings that plague the steel sector.

What this estimate hides, though, is that the strategic benefit of these projects can be easily offset by one-off operational costs, like the R2.7 billion in asset impairment and wind-down charges associated with closing the Longs Business in South Africa. The structural improvement is defintely there, but it's a multi-year effort.

Growth Opportunities

You're looking at ArcelorMittal S.A. (MT) and seeing a cyclical business, but the near-term story is about structural shifts and strategic execution. The direct takeaway is that the company's pivot to high-margin products and integrated mining is expected to drive a significant uplift in earnings, even if revenue growth remains modest compared to the broader US Steel industry.

For the 2025 fiscal year, the consensus revenue estimate sits at approximately $62.03 billion, which is a forecast annual growth rate of about 4.04% through 2027. That's a solid, steady number, but the real story is the expected earnings surge. Analysts project the 2025 Earnings Per Share (EPS) to be around $3.89, showing that margin expansion is the defintely key lever here. This is a business focused on profitability, not just volume.

Strategic Drivers and Product Innovation

The company's growth isn't relying on a massive, immediate market boom; it's driven by three clear, concrete initiatives: mining, M&A, and premium product mix. These projects are designed to deliver a structural EBITDA improvement of $0.7 billion in 2025, with a medium-term target of $2.1 billion.

• Mining Expansion: The Liberia iron ore project is on track to hit its full expanded capacity of 20 million tonnes (Mt) by the end of 2025, with 10 Mt of shipments expected for the year. This internal supply chain control is a major cost advantage.
• North American Premium Steel: The new 1.5 Mt Electric Arc Furnace (EAF) at AM/NS Calvert in the US is commissioning. This EAF is critical because it's the first in North America capable of supplying exposed automotive grades with domestically melted and poured material, capturing a high-margin niche.
• Decarbonization Investment: ArcelorMittal is prioritizing its capital expenditure (capex) envelope of $4.5 billion to $5.0 billion annually, allocating between €300 million and €400 million specifically to decarbonization projects in 2025. This is a smart move, positioning them for the future of green steel demand.

Competitive Edge and Market Position

ArcelorMittal S.A. (MT) has a competitive advantage that goes beyond just scale. It's a combination of vertical integration and market diversification, which helps them weather the steel industry's notorious cycles. Their unique, diversified asset base spans multiple geographies and end markets, which smooths out the regional demand volatility.

Here's the quick math on why this matters: when European demand softened due to high energy costs, the integrated mining segment, with its record iron ore production from places like Liberia, helped stabilize margins. Plus, the company is actively enabling the energy transition, supplying steel for new energy and mobility systems, and investing in high-quality electrical steels.

The company's resilience is also being bolstered by policy. The European Commission's proposed new trade tool, coupled with an effective Carbon Border Adjustment Mechanism (CBAM), is expected to support a more sustainable European steel sector by making imports less competitive. This provides a solid foundation for the European business to earn its cost of capital, just as it is achieving in other regions. If you want a deeper dive into who is betting on this strategy, you should read Exploring ArcelorMittal S.A. (MT) Investor Profile: Who's Buying and Why?