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Aperam SA (APEMY)
OTHER OTC:APEMY
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Aperam SA
(OTC:APEMY)
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Rating:54Neutral
Price Target:
$41.00
▼(-0.85% Downside)
Action:DowngradedDate:02/08/26
The score is held back primarily by sharply weakened profitability and a stretched P/E driven by near-breakeven earnings, despite resilient (but softening) free cash flow. Technicals are supportive with a strong uptrend, and the earnings call adds moderate support via improving near-term EBITDA guidance and identifiable initiatives, but industry/timing uncertainties remain a key risk.
Positive Factors
Cash generation resilience
Aperam's consistently positive operating cash flow (~€405M) and positive free cash flow (~€274M) provide durable internal funding for maintenance capex, site upgrades, debt servicing and dividends. This cash cushion helps the company weather cyclical earnings swings and sustain multi-year investments, supporting execution of strategic programs even as FCF growth has slowed.
Leadership Journey & M&A synergies
Management's Leadership Journey aims to deliver ~€150m incremental EBITDA (plus ~€50m from investments), targeting structural margin and efficiency gains. Successful execution would raise underlying earnings power, diversify contributions beyond commodity spreads, and lengthen earnings durability through operational improvements and realized synergies from acquisitions.
Brazil operations & protective duties
Brazil contributed a steady ~€75m EBITDA in a low cycle and recent duty increases (12.6%→25%) create a more protected regional margin profile. Geographic diversification and tariff uplift provide a durable earnings buffer versus European exposure, improving cash generation stability and lowering reliance on immediate European margin recoveries.
Negative Factors
Sharp profitability erosion
Multi-year revenue declines and severe margin compression left net income near breakeven in 2025, demonstrating that core margins are under structural pressure. Near-zero profitability weakens retained earnings, reduces internal reinvestment capacity, and makes the business highly sensitive to commodity input swings and demand cyclicality over the medium term.
Rising leverage & collapsing returns
Leverage increased materially year-over-year while ROE collapsed, eroding financial flexibility. Higher debt raises fixed servicing costs and refinancing exposure if the cycle remains weak, constraining capacity for opportunistic investments or further M&A and increasing downside risk if margins fail to recover as planned.
Regulatory/timing uncertainty (CBAM/trade defense)
Aperam's planned utilization and margin recovery hinge materially on EU CBAM and trade‑defense outcomes, which remain politically uncertain. Delays or weaker-than-expected measures would postpone utilization gains and margin improvements, making management's normalized EBITDA targets contingent on external regulatory developments rather than solely on company actions.
Aperam SA (APEMY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.83B
Dividend Yield5.12%
Average Volume (3M)41.00
Price to Earnings (P/E)22.2
Beta (1Y)1.03
Revenue Growth-0.40%
EPS Growth-102.89%
CountryUS
Employees12,007
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.47
Shares Outstanding78,036,690
10 Day Avg. Volume0
30 Day Avg. Volume41
Financial Highlights & Ratios
PEG Ratio-2.98
Price to Book (P/B)0.81
Price to Sales (P/S)0.42
P/FCF Ratio9.42
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit0.56
Enterprise Value/Ebitda11.79
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.33
Revenue Forecast (FY)$7.96B
Aperam SA Business Overview & Revenue Model
Company DescriptionAperam S.A., together with its subsidiaries, engages in the production and sale of stainless and specialty steel products worldwide. It operates through three segments: Stainless & Electrical Steel; Services & Solutions; and Alloys & Specialties. The company offers range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. It serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. The company distributes its products through a network of service centers, transformation facilities, and sales offices. Aperam S.A. was incorporated in 2010 and is headquartered in Luxembourg City, Luxembourg.
How the Company Makes MoneyAperam makes money primarily by manufacturing and selling stainless steel and specialty steel products. Its core revenue stream is product sales (typically priced per tonne), where realized revenue depends on shipment volumes, product mix (e.g., standard stainless vs. higher-value specialty grades), and market pricing that is influenced by steel spreads and alloy surcharges (reflecting inputs like nickel and chromium). The company also earns revenue from downstream and value-added activities such as processing, finishing, and distribution-oriented services (often marketed as services/solutions), which can generate additional margin beyond primary steelmaking by providing closer-to-end-user formats and tailored specifications. In addition, Aperam participates in recycling and circular-economy activities (notably around scrap collection/processing and recycled inputs used in its electric arc furnace-based production), which can contribute to earnings through internal cost advantages (lower raw material and carbon-related costs versus alternatives) and, where applicable, external sales of recycling-related products or services. Key factors influencing earnings include input costs (scrap, ferroalloys, electricity), the ability to pass through alloy/energy costs via surcharges or pricing, utilization rates of production assets, and demand conditions in its main regions (Europe and Brazil). Specific material partnerships or customer contracts contributing to earnings are null.
Aperam SA Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a mix of constructive company-specific progress and near-term market headwinds. Highlights include clear CapEx and investment plans (EUR 200m CapEx in 2026 and EUR 160m site upgrades over 3 years), an articulated Leadership Journey expected to add ~EUR 150m EBITDA (including Universal synergies), a stronger Q1/Q2 EBITDA run-rate (EUR 100m quarterly in H1), improved Brazil performance (EUR ~75m EBITDA) and flexible spare EAF capacity with a 7%–10% potential utilization uplift. Lowlights are primarily market-driven: a Q4 import surge created an H1 inventory overhang, CBAM/trade defense timing and importer behaviors remain uncertain (despite a planned 1 July start), a ~EUR 300/tonne margin gap versus historic averages, and limited forward visibility due to short order books (2.5 months). On balance, company fundamentals, clear targets, capacity to ramp and diversification into alloys/specialties give meaningful upside potential, while the lowlights represent industry and timing risks that management is actively addressing.Q4-2025 Updates
Positive Updates
Capacity Utilization and Upside Potential
Current European capacity utilization at Aperam is between 65% and 75%. Management expects a 7%–10% utilization lift from replacement of imports under trade defense measures, and notes flexible electric-arc-furnace (EAF) capacity that can be ramped quickly to capture this upside.
Near-Term EBITDA Momentum (H1 2026)
Guidance that Q1 2026 EBITDA will be higher than Q4 2025 and a EUR 100 million quarterly run-rate is expected in the first half of 2026, with sequential ramping and stronger momentum in Q2.
Brazil Performance and Protective Duties
Brazil EBITDA improved to approximately EUR 75 million in the period reported and is considered a normalized low-cycle run-rate for 2026. Announced increases in Brazilian duties for certain product categories (from 12.6% to 25%) are expected to have a positive impact, estimated at mid-single-digit EBITDA contribution per quarter and to help pick up results from end-Q2 / early-Q3.
Leadership Journey and M&A Synergies
Management outlines a Leadership Journey adding roughly EUR 150 million incremental EBITDA (including Universal synergies). Additional announced investments are expected to add around EUR 50 million of EBITDA (ramping into 2028 with full effect by 2029).
Normalized EBITDA Guidance and Floor
Company sets a normalized EBITDA target range of EUR 700 million–EUR 800 million. Management explains the range reflects a conservative floor (EUR 700m) with upside tied to trade defense/CBAM effectiveness and margin recovery versus prior cycles.
CapEx Clarity and Multi-Year Investment Plan
2026 CapEx guided at around EUR 200 million. A EUR 160 million site-upgrade program over 3 years is included in the 2026 figure; continuity CapEx around EUR 150 million with similar levels expected in 2027–2028 absent new growth projects.
Recycling & Renewables and Alloys & Specialties Targets
R&R guidance remains at EUR 80–85 million and is considered achievable. Alloys & Specialties expected to reach around EUR 100 million plus ~EUR 60 million contribution from Universal and ~EUR 9 million identified synergies, pointing to >EUR 160 million run-rate by year-end as ramps complete.
Limited Exposure to Nickel Volatility
Management states limited exposure to LME nickel volatility for core stainless business because most nickel requirements are met from scrap; the fuels/alloys business that is LME-related is fully hedged. Alloy surcharge increases in February are deemed of limited relevance to European volumes.
Negative Updates
Import Surge and Inventory Overhang
Significant surge of imports at the end of Q4 created an inventory overhang that is expected to depress demand/put pressure on the market into H1 2026 as distributors draw down stocks.
CBAM / Trade Defense Timing and Uncertainty
Outcome and timing of CBAM and the EU trade defense package remain uncertain despite a target application date of 1 July 2026. Benefits depend on importer behavior and final political agreement (European Council, INTA, European Parliament), creating uncertainty over how quickly margins and volumes will recover.
Reduced Visibility due to Short Order Books
Aperam's European stainless order books are relatively short (~2.5 months) because of its integrated distribution model, limiting forward visibility and making full-year guidance dependent on near-term market developments.
Lower Reference Margin vs. Prior Cycles
Management notes that 2025 margins were approximately EUR 300 per tonne below previous averages. This gap is the reason the normalized EBITDA target range (EUR 700m–800m) is set lower than prior aspirations absent full market margin recovery.
Short-Term Demand Characterized as Seasonal
Management describes current order book recovery as a seasonal post-holiday rebound rather than an underlying market improvement, implying limited durable demand improvement at present.
Company Guidance
Management guidance: Q1 EBITDA is expected to be higher than Q4 with a ~EUR100m quarterly run‑rate across H1 2026 (slow start in Q1, ramp in Q2); normalized FY guidance is EUR700–800m (versus a prior ~EUR800m target), built from a 2025 baseline of EUR350m plus ~EUR150m from the Leadership Journey and ~EUR50m of announced investments (full effect by 2029), with the remaining EUR50–75m dependent on trade‑defense/CBAM recovery; CapEx is c. EUR200m in 2026 (including EUR160m of site upgrades over 3 years; continuity CapEx ~EUR150m); current capacity utilization is ~65–75% with safeguard measures expected to lift utilization 7–10%; Brazil delivered ~EUR75m EBITDA in 2025 (low cycle) and higher Brazilian duties (c.12.6%→25%) are expected to add mid‑single‑digit EUR EBITDA per quarter; A&S target ~EUR100m (+ ~EUR60m from Universal and ~EUR9m synergies) and R&R guidance remains around EUR80–85m; order books run ~2.5 months, Q4 import surge may create an H1 overhang, EU trade measures aim to start 1 July 2026, CBAM payments are retroactive to 2027, and nickel exposure is limited with fuel‑alloys positions fully hedged.Aperam SA Financial Statement Overview
Summary
Income statement weakness is the main drag: multi-year revenue declines and severe margin compression left 2025 net income near breakeven. Balance sheet is still reasonably capitalized, but leverage rose and ROE collapsed. Cash flow is the bright spot with positive operating and free cash flow, though free cash flow has been trending down.Income Statement
Profitability has deteriorated sharply versus prior years. Revenue has been declining for multiple years (2023: -19.2%, 2024: ~-5.1%, 2025 annual: -9.2%), and margins have compressed materially: net margin fell from 3.7% (2024) to ~0.15% (2025), with EBIT margin down to ~0.26% (2025). While EBITDA margin remains positive (~4.5% in 2025), earnings quality is weak given near-breakeven net income (2025: ~€8.6M vs €231M in 2024). Strength: the business remains profitable on an EBITDA basis despite the downturn; weakness: earnings are highly cyclical and currently under significant pressure.34
Negative
Balance Sheet
Leverage is moderate but has moved in the wrong direction. Debt-to-equity increased to ~0.41 in 2025 from ~0.23 in 2024, reflecting higher debt and slightly lower equity. The balance sheet still shows a sizable equity base (2025 equity ~€3.19B vs assets ~€5.17B), which provides some cushion, but returns have compressed dramatically: return on equity dropped to ~0.27% in 2025 from ~6.9% in 2024 (and much higher in 2021–2022). Strength: equity capitalization remains solid; weakness: rising leverage and collapsing returns reduce financial flexibility if the downcycle persists.56
Neutral
Cash Flow
Cash generation is holding up better than earnings, but growth is soft. Operating cash flow improved in 2025 (to ~€405M vs ~€280M in 2024), and free cash flow remained positive (~€274M in 2025). However, free cash flow growth is negative in 2025 (-13.0%) and was also negative in 2024, indicating weakening momentum. Cash conversion versus earnings is mixed: free cash flow is well above net income in absolute terms given very low 2025 earnings, but the provided free-cash-flow-to-net-income ratio is below 1.0 (2025: ~0.68), suggesting not all accounting profit is translating into incremental free cash flow. Strength: consistently positive operating and free cash flow; weakness: declining free cash flow trend and uneven conversion metrics.59
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.08B | 6.25B | 6.59B | 8.16B | 5.10B |
| Gross Profit | 6.08B | 449.00M | 330.00M | 1.18B | 1.23B |
| EBITDA | 325.62M | 354.00M | 364.00M | 958.00M | 1.20B |
| Net Income | 9.00M | 231.00M | 203.00M | 625.00M | 968.00M |
Balance Sheet | |||||
| Total Assets | 5.17B | 5.84B | 6.21B | 6.26B | 5.91B |
| Cash, Cash Equivalents and Short-Term Investments | 324.86M | 216.00M | 443.00M | 457.00M | 524.00M |
| Total Debt | 1.30B | 760.00M | 934.00M | 925.00M | 990.00M |
| Total Liabilities | 1.96B | 2.47B | 2.76B | 2.87B | 2.96B |
| Stockholders Equity | 3.19B | 3.35B | 3.44B | 3.38B | 2.94B |
Cash Flow | |||||
| Free Cash Flow | 273.75M | 125.00M | 170.00M | 346.00M | 398.00M |
| Operating Cash Flow | 405.34M | 280.00M | 471.00M | 642.00M | 550.00M |
| Investing Cash Flow | -565.75M | -155.00M | -303.00M | -297.00M | -183.00M |
| Financing Cash Flow | 267.99M | -336.00M | -152.00M | -419.00M | -197.00M |
Aperam SA Technical Analysis
Neutral
41.35
Price Trends
44.45
Negative
40.98
Negative
36.12
Positive
Market Momentum
-1.99
Positive
39.35
Neutral
17.32
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APEMY, the sentiment is Neutral. The current price of 41.35 is below the 20-day moving average (MA) of 45.28, below the 50-day MA of 44.45, and above the 200-day MA of 36.12, indicating a neutral trend. The MACD of -1.99 indicates Positive momentum. The RSI at 39.35 is Neutral, neither overbought nor oversold. The STOCH value of 17.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for APEMY.
Aperam SA Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $5.09B | 61.64 | 6.07% | ― | -16.81% | -67.68% | |
67 Neutral | $6.82B | 10.04 | 10.54% | 1.02% | -1.61% | -81.36% | |
65 Neutral | $38.91B | 11.03 | 5.87% | 1.03% | -4.51% | ― | |
65 Neutral | $7.44B | 17.63 | 3.53% | 7.02% | -16.69% | 585.38% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $6.26B | 29.29 | 2.53% | 2.92% | -2.53% | -36.08% | |
54 Neutral | $2.83B | 22.24 | 0.28% | 5.12% | -0.40% | -102.89% |
* Basic Materials Sector Average
APEMY
Aperam SA
39.95
7.61
23.53%
MT
ArcelorMittal
51.41
19.90
63.13%
CMC
Commercial Metals Company
61.46
14.70
31.45%
GGB
Gerdau SA
3.28
0.34
11.72%
SIM
Grupo Simec SA De CV
30.07
3.43
12.86%
TX
Ternium SA
37.89
8.16
27.45%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.