Buy Signal on Eramet (ERA-FR)
Eramet is a €1.1Bn market cap company and a key player in the extraction and valorisation of metals (manganese, nickel, mineral sands) and the elaboration and transformation of alloys with a high added value (high-speed steels, high-performance steels, superalloys, aluminium and titanium alloys). The Group supports the energy transition by developing activities with high growth potential. These include lithium extraction, refining, and recycling. Eramet customers include companies which specialize in carbon and stainless steel, aerospace, pigments, energy, and new battery generations.
revenues are split between manganese (48%), high performance alloys (23%), nickel (21%) and mineralized sands (8%).
After a sharp drop in revenues and an expected loss of €-400m in 2020 (including impairments), Eramet is expected to recover progressively from 2021 and to be profitable again in 2022 thanks to higher metals prices, cost adjustment programm and Aerospace sector
recovery. The Manganese divison continue to contribute positively to the EBITDA while Nickel division is under pressure.
Short term catalyst: world cylclical recovery, higher metal prices.
This signal looks consistent with the strong momentum in Basic Resources.