Morgan Stanley has moved SSAB AB (ST:SSABa) up a notch in its coverage, changing its rating to "overweight" from "equal-weight" and boosting the one-year price target to SKr 94 from SKr 73. The firm concurrently named SSAB to its Top Pick list, replacing ArcelorMittal on that roster.
The brokerage highlighted a trio of positives underpinning the decision: strengthening earnings momentum, particular resilience in the U.S. plate segment, and a lower degree of exposure to energy costs. Morgan Stanley said the current share price does not fully capture the combined effect of U.S. plate momentum, stable Special Steels earnings, and reduced energy-cost sensitivity.
SSAB closed at SKr 80.74 on May 4, trading within a 52-week range of SKr 87.50 at the high and SKr 52.84 at the low. The company carries a market capitalization of SKr 80.52 billion, reported net debt of SKr 7.01 billion, and an enterprise value of SKr 71.78 billion.
On the earnings front, Morgan Stanley expects EBITDA to move from SKr 10.19 billion in 2025 to SKr 14.01 billion in 2026, SKr 15.92 billion in 2027, and SKr 14.23 billion in 2028. Earnings per share forecasts are SKr 7.43 in 2026, SKr 8.85 in 2027, and SKr 7.45 in 2028.
The brokerage's valuation work shows the stock trading at 10.9 times estimated 2026 EV/EBITDA, falling to 5.4 times by 2027 and remaining at that level into 2028. That contrasts with a through-cycle average EV/EBITDA of 7.6 times. Morgan Stanley noted that this pattern implies valuation compression from 2026 to 2027 even as EBITDA rises from SKr 14.01 billion to SKr 15.92 billion, which the firm interprets as the market not fully pricing in stronger earnings expectations.
Revenue is projected to be SKr 101.05 billion in 2026, SKr 103.16 billion in 2027, and SKr 103.77 billion in 2028 per the bank's model.
Execution risk remains a consideration. Morgan Stanley pointed to the Oxelösund electric-arc-furnace project, which is targeting an early 2027 start to production, and the longer-term Luleå transformation project, where production is targeted for the end of 2029.
For investors weighing a position, the article posed the question: should you invest $2,000 in SSABa right now? It noted that ProPicks AI evaluates SSABa alongside thousands of other companies monthly using more than 100 financial metrics. The AI tool analyzes fundamentals, momentum, and valuation without bias and cited notable past winners it identified, including Super Micro Computer at +185% and AppLovin at +157%.
Bottom line - Morgan Stanley's upgrade and higher price target reflect a more optimistic near-term earnings outlook driven by U.S. plate strength and lower energy-cost exposure, but execution of major capital projects remains an important uncertainty for the company's trajectory.