Acerinox shares come from marking a bullish streak of nine sessions, which has resulted in a revaluation of more than 9 percent.
Despite this rise, the company, which is the most recommended on the IBEX 35, has a rebound potential of 42 percent, according to the consensus of analysts from finanzas.com.
The company is taking advantage of the good moment that the stainless steel market is going through and the strength of demand, which has allowed prices to rise up to six times this year.
In addition, the group has just announced a share buyback for 150 million euros that exceeded market expectations for the amount and will boost the dividend, as a result of the progress of the business, explained the sources consulted.
In mid-November, Finanzas.com already reported that Acerinox was incubating a powerful upward trend, prospects that finally materialized in the final stretch of the year.
The recovery of the sector elevates Acerinox
With 95 percent buy recommendations and no sales advice, Acerinox is the preferred company of the IBEX 35, along with Arcelormittal.
Analysts’ attachment to the steel producer is the result of two factors, the good tone of the sector and the discount at which the company is listed.
The rise in the stock market is explained by the “good performance and recovery of the steel sector, as well as the high demand from China,” he said. Diego morin, an IG analyst, speaking to finance.com.
Not even the deliberate maneuvers of the Asian giant in recent months to bring down steel prices took their toll on Acerinox.
The good sector momentum translated into a “strong recovery in demand” and an increase in production, he added. Cesar Sanchez-Grande, director of analysis of Renta 4 Banco.
Rising prices and share buybacks
Still, inventory levels remain below their historical average in Europe and the United States, which has allowed steel prices to rise.
Up to six times it has increased them Acerinox, the last one just a few weeks ago. “This is a positive reflection of the good situation of demand in the American market, where in addition protectionist measures continue to help,” they explained in Sabadell Bank.
In the opinion of Morin, the group could have “a good performance in 2022, since it is expected that the demand for the metal will continue to improve and above all, with steel prices that are expected to rise.”
To all these green shoots we must add the share buyback just announced by Acerinox. The news was expected, but not the amount, since the 150 million “exceeds our forecast of 100 million,” they noted in JP Morgan.
The news “comes to be a reflection of a good evolution in the results in this exercise, of the generation of cash and of the good perspectives”, they emphasized in Sabadell Bank. For 2022, Acerinox discounts a dividend yield close to 5 percent.
Bounce options for Acerinox
With these perspectives, Morin he placed the rebound potential of Acerinox at 25 percent, although first he will have to break down the psychological barrier of 12 euros.
In his opinion, the stock is currently undervalued. He reaches the same conclusion Sanchez-Grande, when he points out that the price “does not include the positive fundamental factors”. The target price for this expert is 19.3 euros, which offers a return potential of 67 percent.
Due to technical factors, Jose Luis Herrera, an analyst at Global Investment Bank (BIG), said that the target of the ceiling of the bullish channel is between 12.25-12.5 euros. “It is the area to beat to see higher prices.”
With its comeback movement, Acerinox easily surpassed the average of 200 sessions and left the relevant support of the price, which is at 9.5 euros, far behind.