ArcelorMittal Shares Up 25% in 3 Months: What's Driving the Rally?

ArcelorMittal S.A.’s MT shares have gained 24.8% in the past three months. The company has also outperformed the Zacks Steel - Producers industry’s 18.4% rise over the same time frame. 

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ArcelorMittal’s capacity expansion has supported the rally and focus on higher-value, lower-carbon steel products, including new electric arc furnace (EAF) and non-grain-oriented electrical steel (NOES) projects. Strong second-quarter performance, with EBITDA rising sequentially, further strengthens the growth outlook. Improving European demand, supportive trade measures and robust shareholder returns also underpin the positive momentum. 

Let’s take a look at the factors that are driving MT stock. 

ArcelorMittal Advances Growth Through Capacity Expansion 

ArcelorMittal continues to expand its steelmaking capacity while increasing its focus on higher-value-added and lower-carbon steel products. It is advancing strategic projects across Europe, including a new 1.1-Mt EAF at Gijón, a 0.8-Mtpa capacity expansion at Sestao and a new 2-Mtpa EAF at Dunkirk. The company is also strengthening its electrical steel and downstream capabilities, including NOES projects in Europe and the United States, to address the growing demand for specialized steel products and support long-term growth.

ArcelorMittal continues to advance its growth investments, including the development of a NOES facility in Alabama. This new plant aims to meet the rising demand for high-quality electrical steel while supporting manufacturers with a reliable domestic supply and addressing supply chain challenges. As part of this initiative, the ArcelorMittal Calvert plant will include an annealing and pickling line, reversing cold mill and annealing and varnishing line, with capacity of up to 150,000 tons per year and completion targeted for the second half of 2027.  

The company is also progressing with the Liberia iron ore expansion, which is being commissioned toward a 20-million-ton annual capacity. In addition, ArcelorMittal is advancing studies for a potential second 1.5-million-ton EAF at Calvert, which could expand domestic steelmaking capacity and strengthen its position in the U.S. market.

ArcelorMittal remains committed to enhancing shareholder value through dividends and share buybacks. During the first half of 2026, the company returned $0.7 billion to shareholders, comprising $0.2 billion in dividends and $0.5 billion through share repurchases. Its 2026 capital return policy includes a quarterly base dividend of 15 cents per share, with 50% of post-dividend free cash flow allocated to share buybacks.

ArcelorMittal generated roughly $1 billion of operating cash flow in the second quarter of 2026, benefiting from improved operating performance and lower working-capital investment compared with the first quarter. EBITDA increased 22.9% sequentially to $2.1 billion, supported by improved performance across all steel segments and positive price-cost effects. 

ArcelorMittal expects shipments in the second half of 2026 to exceed first-half levels across all segments. European steel shipments are projected to be stable to slightly higher sequentially in the third quarter. 

ArcelorMittal expects the implementation of the new tariff rate quota mechanism, together with the Carbon Border Adjustment Mechanism, to support higher domestic capacity utilization and improve profitability in Europe. Stronger order books are also supporting the restart of production capacity across the region.

MT’s Zacks Rank & Key Picks

MT currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Basic Materials space are Worthington Steel, Inc. WS, Carpenter Technology Corporation CRS and Avient Corporation AVNT. WS currently sports a Zacks Rank #1 (Strong Buy), while CRS and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WS’ current-year earnings stands at $3.4 per share, implying a 52.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 13.8%. Shares of the company have gone up by around 0.8% in the past three months.

The Zacks Consensus Estimate for CRS’ current fiscal-year earnings is pegged at $12.92 per share, implying a 20.1% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.4%. Shares of CRS have surged around 33.5% in the past three months.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%. Shares of AVNT have surged around 39.1% in the past three months.

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This article originally published on Zacks Investment Research (zacks.com).

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