Eramet SA (ERA) AI Stock Analysis

• Market Cap: €1.37B
• Dividend Yield: 3.11%
• Average Volume (3M): 42.35K
• Price to Earnings (P/E): 108.8
• Beta (1Y): 1.74
• Revenue Growth: -6.91%
• EPS Growth: -222.35%
• Country: FR
• Employees: 8,770
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Industrial Materials
• EPS (TTM): -5.32
• Shares Outstanding: 28,755,047
• 10 Day Avg. Volume: 27,209
• 30 Day Avg. Volume: 42,353
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €48.00
• Price Target Upside: -1.19% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 53 Neutral
• Price Target: €52.00 ▲(7.04% Upside)

Eramet SA's overall stock score reflects significant financial challenges, including declining revenue, high leverage, and liquidity issues. Technical analysis provides some neutral signals, but the negative P/E ratio and valuation concerns weigh heavily on the score. The lack of earnings call data and corporate events further limits positive influences on the stock's outlook.

Positive Factors

Financial Performance

Eramet should post a 35% increase in Q3 sales, see its EBITDA multiply by 4x in H2, and could double its profits again over 2025.

Market Conditions

Manganese ore prices have doubled following the shutdown of the world's second largest mine in Australia.

Valuation

Eramet remains particularly discounted, trading at less than 2x its adjusted EBITDA 2025e and less than 3x its underlying EBITDA multiple.

Negative Factors

Financial Performance

Eramet posted a net loss of €41 million in the first half of 2024.

Growth Prospects

With no further growth prospects (apart from lithium), Eramet can no longer hope for a fundamental revaluation of its share price.

Production Targets

The French diversified mining group announced that it was revising its manganese ore and nickel production targets sharply downwards.

Eramet SA Business Overview & Revenue Model

Company Description

ERAMET S.A. operates as a mining and metallurgical company worldwide. The company extracts and processes manganese ore, nickel ore, and mineral sands. It also produces ferronickel, high purity nickel metal, nickel salts, nickel and cobalt chlorides, nickel carbonate, nickel ferroalloys, and other metallic salts used in stainless steel, catalysis and pigments, and alloy steel and casting; manganese alloys, such as high-carbon ferromanganese, silicomanganese, low and medium-carbon ferromanganese, and low-carbon silicomanganese for use in batteries, fertilizers, pigments, different reagents, construction, and automotive industries; and mineral sands, such as titanium dioxide, high-purity pig iron, zircon, and ilmenite used in ceramics and pigments. In addition, it operates Moanda mine in Gabon; nickel mines in New Caledonia and Indonesia; and mineral sand mine in Senegal and Argentina. ERAMET S.A. was incorporated in 1880 and is headquartered in Paris, France.

How the Company Makes Money

Eramet generates revenue primarily through the sale of its mining products, including nickel and manganese ores, as well as refined metals and alloys. The company benefits from long-term contracts with major customers in the automotive and steel industries, which provide stable revenue streams. Additionally, Eramet has established strategic partnerships and joint ventures that enhance its market reach and operational efficiency. The demand for nickel, particularly in electric vehicle batteries, has also contributed to revenue growth, alongside fluctuations in global metal prices, which impact profitability. The company's focus on sustainable mining practices and reducing its carbon footprint further positions it favorably in a market increasingly driven by environmental considerations.

Eramet SA Financial Statement Overview

Summary

Eramet SA's financial health is under strain. The income statement shows declining revenue and profitability issues, with a low net profit margin of 0.48%. The balance sheet highlights high leverage with a debt-to-equity ratio of 1.54 and low returns on equity at 0.97%. Cash flow statements indicate liquidity challenges, with persistent negative free cash flow. These factors suggest significant financial instability.

Income Statement

The income statement for Eramet SA shows significant volatility. The Gross Profit Margin for 2024 is approximately 58.45%, which is relatively strong, but the Net Profit Margin is only 0.48%, indicating challenges in translating revenue into net income. Revenue has decreased for two consecutive years, with a notable decline of 12.19% from 2023 to 2024. The EBIT Margin is low at 1.74%, and although the EBITDA Margin is better at 7.88%, these figures suggest profitability issues. Overall, while the company has a solid Gross Profit Margin, declining revenue and profitability margins are concerning.

Balance Sheet

Eramet SA's balance sheet presents mixed results. The Debt-to-Equity Ratio for 2024 is approximately 1.54, indicating a high level of debt relative to equity, which could expose the company to financial risk. The Return on Equity (ROE) is quite low at 0.97%, reflecting inefficiencies in generating profits from shareholder equity. The Equity Ratio stands at 22.28%, suggesting a lower reliance on equity financing. While the company maintains substantial total assets, the high leverage and low ROE are potential red flags.

Cash Flow

The cash flow analysis reveals significant challenges for Eramet SA. The company has experienced negative Free Cash Flow for the past two years, with a concerning decline of 52.06% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is negative, highlighting cash generation issues relative to reported profits. The Free Cash Flow to Net Income Ratio is also negative, suggesting that the company struggles to convert income into cash flow. These factors indicate that the company might face liquidity issues and difficulty in funding operations.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.93B	3.34B	5.01B	3.67B	2.79B
Gross Profit	1.71B	2.00B	1.23B	762.00M	255.00M
EBITDA	231.00M	209.00M	1.32B	1.15B	262.00M
Net Income	14.00M	109.00M	740.00M	298.00M	-675.00M
Balance Sheet
Total Assets	6.46B	6.28B	7.28B	6.35B	6.62B
Cash, Cash Equivalents and Short-Term Investments	929.00M	1.61B	1.66B	1.18B	1.81B
Total Debt	2.22B	2.23B	2.00B	2.11B	3.19B
Total Liabilities	4.48B	4.28B	5.04B	5.02B	5.66B
Stockholders Equity	1.44B	1.60B	1.78B	1.01B	725.00M
Cash Flow
Free Cash Flow	-812.00M	-534.00M	428.00M	461.00M	-4.00M
Operating Cash Flow	-125.00M	172.00M	1.02B	773.00M	309.00M
Investing Cash Flow	-306.00M	-557.00M	-538.00M	-421.00M	-375.00M
Financing Cash Flow	-12.00M	269.00M	-60.00M	-1.03B	969.00M

Eramet SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 48.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ERA, the sentiment is Negative. The current price of 48.58 is below the 20-day moving average (MA) of 50.86, below the 50-day MA of 50.67, and below the 200-day MA of 50.64, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 42.01 is Neutral, neither overbought nor oversold. The STOCH value of 11.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:ERA.

Eramet SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$10.36B	6.35	0.76%	2.84%	3.10%	-36.03%
ERA	53 Neutral	€1.37B	108.77	-7.36%	3.11%	-6.91%	-222.35%
0IB0	―	€4.34B	20.06	3.56%	―	―	―
0NPX	―	€1.81B	49.79	-5.29%	―	―	―
0NR2	―	€3.49B	9.76	16.47%	―	―	―