Salzgitter lowers forecast: shares plunge after disappointing quarter

Salzgitter lowers forecast: shares plunge after disappointing quarter

A gloomy mood prevails at Salzgitter AG. The company has drastically revised down its annual forecast after a weak second quarter. The new expectations are for sales of between 9.0 and 9.5 billion euros, after previously forecasting 9.5 to 10 billion euros. The operating result (EBITDA) is also significantly reduced and is now only between 300 and 400 million euros - previously it was 350 to 550 million euros. The pre-tax result is expected to be a loss of between 100 and 0 million euros, whereas last year the balance sheet was balanced.

Particularly worrying is external sales, which fell by almost 12% to just 2.3 billion euros in the second quarter. EBITDA fell dramatically from 107.3 million euros to 38.2 million euros. In the same breath, the company reported a loss of 56.5 million euros before taxes - in the same period last year it was only 5.7 million euros. The pressure from the weak economy and falling demand for steel has already been felt throughout the year, as Der Aktionär reports.

Analyst opinions and market development

Analysts are also skeptical. JPMorgan has maintained its “Underweight” rating, with a price target of EUR 18.40. The current pre-market price on July 17th was 26.24 euros, which corresponds to a decline of 8.96%. Only two analysts recommend buying the stock, seven recommend holding it, while four are on the sell list. The average recommendation for the Salzgitter share has deteriorated to “Reduce”. The average price target is now 23.51 euros with a downward gap of 10.40%, while the high price target seems quite optimistic at 45.00 euros plus a 71.49% upward gap.

This development is in the context of the general market situation, which is characterized by falling crude steel production in Germany. According to WV Stahl, crude steel production fell by 6.4% in May 2025 compared to the previous year, with a total output of around 3 million tons. This is the third consecutive month of double-digit declines, indicating continued weak demand.

Steel industry faces challenges

The steel industry is currently facing numerous challenges. Production on the blast furnace converter route has fallen by over 13%, while electrical steel production is at least showing positive signs. This market environment makes business even more difficult for Salzgitter AG, which has to react to massive declines so far this year. The cyclical steel business remains tense and the stock's chart technique is battered - with critical support levels at 23.80 euros and 21.77 euros, while the 90-day line is at 22.56 euros.

In order to overcome the ongoing difficulties, it will be crucial for Salzgitter AG to adapt to market changes and possibly develop new strategies. However, forecasts for global steel demand point to a slight recovery of around 1% next year, which could be a small bright spot in an overall challenging situation.