Outokumpu Oyj (OUT1V.HE) | Investment Case

1. Company Snapshot

1.a. Company Description

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally.It offers cold rolled coils, strips, and sheets; precision strips; hot rolled coils, strips, and plates; quarto plates; precise components, including welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, press plates, roll shells, and blancs and disks; semi-finished stainless steel long products comprising billets and blooms, forged and rolled billets, cast slabs, ingots, and rebar; and stainless steel wire rods, wires, and bars.Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy and marine; and heavy industries.

Outokumpu Oyj was founded in 1910 and is headquartered in Helsinki, Finland.

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1.b. Last Insights on OUT1V

Outokumpu Oyj's recent prospects are bolstered by improved industry demand and a stronger earnings outlook, prompting analysts to raise their price targets from €3.49 to €3.68. The company's EVOLVE strategy is driving investments in critical carbon-free materials, such as a $45 million pilot plant in the US for chromium metal and enriched ferrochrome production. This project, set to operate in H1 2027, represents a significant step in scaling up proprietary technology. With no recent earnings release indicating otherwise, Outokumpu's strategic investments and favorable industry conditions position the company for potential growth.

1.c. Company Highlights

Last Price	4.82
Change Percentage	3.84%
Open	4.85
Previous Close	4.64
Market Cap ( Millions)	2270
Volume	1320418
Year High	5.77
Year Low	2.7
M A 50	4.97
M A 200	4.16

FCF Yield	0.88%
Dividend Yield	6.32%
ROE	-3.91%
Debt / Equity	18.41%
Net Debt / EBIDTA	265.00%
Price To Book	0.67
Price Earnings Ratio	-16.57
Price To FCF	113.51
Price To sales	0.42
EV / EBITDA	25.35

2. Outokumpu's Q4 Results: Weak Stainless Steel Market, But Positive Outlook

Outokumpu reported a weak Q4 result, with group profitability of EUR 10 million, impacted by lower deliveries and pricing in Europe. The company's adjusted EBITDA for the full year was EUR 167 million, with BA Americas and Ferrochrome seeing improved profitability. The earnings per share (EPS) came out at -0.13794, missing estimates of 0.06. Revenue growth is expected to be 7.6% next year, according to analyst estimates.

Publication Date: Mar -04

                                    📋 Highlights
                                    Adjusted EBITDA 2024::
                                                EUR 167 million despite weak stainless steel market and Q4 challenges.
2026 EBITDA Target::
                                                EUR 750-850 million (up from prior EUR 500-600 million) driven by CBAM and investments.
2026 CapEx Guidance::
                                                EUR 200 million for ongoing initiatives, excluding Tornio/Avesta investments.
Amber Americas Performance::
                                                Strong profitability despite seasonally lower Q4 deliveries, with 20%-30% stainless steel volume growth expected in Q1.
Ferrochrome Growth::
                                                3 new low-emission products launched, with rising demand from CBAM and tariffs, boosting 2026 P&L recovery.

                                

Financial Performance

The company's financial performance was impacted by the weak stainless steel market, with uncertainty and Asian imports affecting the industry. Despite this, Outokumpu maintained a strong liquidity position, with increased free cash flow and a new unsecured EUR 800 million RCF with a 4-year maturity. As Marc-Simon Schaar, CFO, highlighted, the company's focus is on improving working capital and inventory efficiency.

Business Area Performance

Business Area Europe saw weak market conditions, with volumes and pricing affected by the ERP rollout. In contrast, Business Area Americas delivered a strong performance, despite seasonally lower deliveries. Ferrochrome saw strong demand for low-emission European ferrochrome, driven by CBAM and tariffs.

Outlook

Outokumpu expects favorable market dynamics in 2026, driven by CBAM and safeguards in Europe, and early signs of market recovery in the Americas. The company is optimistic about their future, with a potential positive outcome of the USMCA negotiation supporting their business in Mexico and creating capacity for sales in the U.S.

Valuation

Outokumpu's current valuation metrics indicate a P/E Ratio of -17.92, P/B Ratio of 0.72, and EV/EBITDA of 28.76. The Dividend Yield is 4.99%, and the Free Cash Flow Yield is 0.81%. The Net Debt / EBITDA ratio is 4.21, indicating a relatively high debt burden. These metrics suggest that the market is pricing in a challenging environment for the company, but the expected improvement in profitability and cash flow could lead to a re-rating of the stock.

3. NewsRoom

Basic Materials Roundup: Market Talk

Mar -18

Source:

3 European Stocks Estimated To Be Trading Up To 39.9% Below Intrinsic Value

Feb -16

Source:

Outokumpu Oyj (OUTFF) Full Year 2025 Earnings Call Highlights: Navigating Market Challenges ...

Feb -12

Source:

European Stocks Estimated To Be Trading Below Fair Value In February 2026

Feb -11

Source:

3 European Stocks Estimated To Be Trading At Discounts Of Up To 46%

Feb -11

Source:

European Market Value Stocks Offering Possible Investment Opportunities

Jan -16

Source:

3 European Stocks Estimated To Be Up To 48.1% Below Intrinsic Value

Dec -29

Source:

Global Market's December 2025 Value Stocks Trading At Estimated Discounts

Dec -29

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.72%)

6. Segments

Europe

Expected Growth: 3.5%

Outokumpu Oyj's 3.5% growth in Europe is driven by increasing demand for stainless steel in the automotive and construction industries, supported by EU's green initiatives and infrastructure development. Additionally, the company's cost-saving initiatives and strategic investments in digitalization and sustainability contribute to its growth momentum.

Americas

Expected Growth: 4.2%

Outokumpu Oyj's 4.2% growth in Americas is driven by increasing demand for stainless steel in the region's automotive and construction industries, coupled with the company's strategic expansion into the US market, and favorable trade policies. Additionally, growing investments in renewable energy and infrastructure projects are boosting demand for Outokumpu's specialty steel products.

Ferrochrome

Expected Growth: 3.8%

Outokumpu Oyj's Ferrochrome segment growth of 3.8% is driven by increasing demand from stainless steel producers, particularly in Asia, and the company's cost-cutting initiatives. Additionally, the segment benefits from Outokumpu's diversified customer base and its ability to adapt to changing market conditions.

Other

Expected Growth: 4.5%

Outokumpu Oyj's 4.5% growth is driven by increasing demand for stainless steel in the automotive and construction industries, coupled with the company's successful cost savings initiatives and strategic investments in emerging markets, such as Asia and South America.

7. Detailed Products

Stainless Steel

High-quality stainless steel products for various industries, including construction, transportation, and consumer goods.

Ferritic Stainless Steel

Cost-effective and corrosion-resistant ferritic stainless steel products for automotive, construction, and industrial applications.

Austenitic Stainless Steel

High-temperature resistant austenitic stainless steel products for chemical processing, oil and gas, and power generation industries.

Duplex Stainless Steel

High-strength and corrosion-resistant duplex stainless steel products for oil and gas, chemical processing, and marine industries.

Precipitation Hardening Stainless Steel

High-strength and corrosion-resistant precipitation hardening stainless steel products for aerospace, industrial, and sports equipment applications.

8. Outokumpu Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Outokumpu Oyj is moderate due to the availability of alternative materials and technologies in the stainless steel industry.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the customer base and the lack of concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of a few large suppliers of raw materials and the dependence of Outokumpu Oyj on these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the stainless steel industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several large players in the industry, leading to a competitive market with high levels of advertising and promotional expenses.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	10.49%
Debt Cost	10.43%
Equity Weight	89.51%
Equity Cost	10.43%
WACC	10.43%
Leverage	11.72%

11. Quality Control: Outokumpu Oyj passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stalprodukt

A-Score: 5.4/10

Value: 7.8

Growth: 2.3

Quality: 3.4

Yield: 5.6

Momentum: 6.0

Volatility: 7.3

1-Year Total Return ->

Outokumpu

A-Score: 5.2/10

Value: 6.7

Growth: 2.6

Quality: 3.0

Yield: 7.5

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

Alleima

A-Score: 4.6/10

Value: 4.9

Growth: 5.2

Quality: 4.8

Yield: 3.1

Momentum: 5.5

Volatility: 4.0

1-Year Total Return ->

Salzgitter

A-Score: 4.3/10

Value: 9.3

Growth: 2.4

Quality: 2.4

Yield: 1.9

Momentum: 9.0

Volatility: 1.0

1-Year Total Return ->

Klöckner

A-Score: 4.2/10

Value: 8.5

Growth: 2.2

Quality: 1.4

Yield: 5.0

Momentum: 6.5

Volatility: 1.7

1-Year Total Return ->

Cognor

A-Score: 3.8/10

Value: 7.6

Growth: 1.6

Quality: 2.3

Yield: 4.4

Momentum: 5.0

Volatility: 2.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

21.16%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.43%

Outokumpu Oyj - FI0009002422

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on OUT1V

1.c. Company Highlights

Higher Yield

Cheaper

Weak Momentum

Earnings Miss

Revenues Miss

Average Yield

Lower Quality

Stable Momentum

Fairly Valued

Earnings Beats

Average Quality

Average Growth

Revenues Beats

Strong Momentum

2. Outokumpu's Q4 Results: Weak Stainless Steel Market, But Positive Outlook

Financial Performance

Business Area Performance

Outlook

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.72%)

6. Segments

Europe

Expected Growth: 3.5%

Americas

Expected Growth: 4.2%

Ferrochrome

Expected Growth: 3.8%

Other

Expected Growth: 4.5%

7. Detailed Products

Stainless Steel

Ferritic Stainless Steel

Austenitic Stainless Steel

Duplex Stainless Steel

Precipitation Hardening Stainless Steel

8. Outokumpu Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Outokumpu Oyj passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.82$

Current Price

4.82$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA