Key insights
- Morgan Stanley upgraded SSAB due to margin outlook, citing potential EBITDA growth from US plate spreads and European steel framework. US shipbuilding initiatives could further boost demand. While primarily impacting SSAB, positive sentiment in the steel sector could have a mildly bullish influence on US-listed steel companies.
Investing.com - Morgan Stanley upgraded SSAB AB (SSABA:SS) (OTC:SSAAY) to Overweight from Equalweight and raised its price target to SEK94.00 from SEK73.00.
The firm said SSAB trades at approximately 5.6 times 2026-27 EV/EBITDA, compared with a 7.6 times through-cycle average multiple. Currently, the stock trades at 7.12 times EV/EBITDA based on the last twelve months, with shares at $4.72—touching their 52-week high after a 54% surge over six months. Morgan Stanley sees potential for the company’s normalized EBITDA to nearly double if U.S. plate spreads prove more durable and the new European steel framework is more fully reflected in margins. InvestingPro analysis suggests the stock is currently overvalued, though subscribers have access to 13 additional ProTips examining the company’s financial health and growth prospects.
Such a scenario would drive compression in the implied multiple toward approximately 3.6 times, according to the firm. U.S. shipbuilding may also emerge as a medium to long-term demand vector for locally produced plate.
Executive Order 14269 and America’s Maritime Action Plan are focused on rebuilding commercial and naval shipbuilding capacity, as well as port and shipyard infrastructure. This could support demand for plate used in hulls, decks, structural sections and marine infrastructure.
Morgan Stanley raised its price target underpinned by an approximately 30% uplift to its 2026-27 EBITDA profile for SSAB.
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