Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 26 May, 26 | ASTL | Buy | USD 4.92 | USD 5.2 | USD 5.45 | 1 day | Closed |
10.77%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Algoma Steel Group Inc. produces and sells steel products in Canada, the United States, and internationally. The company offers flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural tube product manufacturers, and the light manufacturing and transportation industries; and plate steel products consisting of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, armored products for military applications, diameter pipelines, and wind energy generation equipment. It also provides by-products, such as furnace and buckwheat coke, braize coke, and flue dust; high sulpur beach and kish iron, BOF pit grissly and scrap, BOF and pellet fines, and mill roll scale; light oil and coal tar; granulated and air cooled slag; and machine shop turnings, used mill rolls, recycled oil, non-ferrous metal, and lime fines. The company was founded in 1901 and is headquartered in Sault Sainte Marie, Canada.
Improvement in Adjusted EBITDA Loss: Q1FY26: Adjusted EBITDA loss of CAD 28.7 Mn vs Q1FY25: Adjusted EBITDA loss of CAD 46.7 Mn
Increase in Average Net Sales Realization per Ton: Q1FY26: CAD 1,193/ton vs Q1FY25: CAD 986/ton
Increase in Net Loss: Q1FY26: Net loss of CAD 159.4 Mn vs Q1FY25: Net loss of CAD 24.5 Mn
Decline in Revenue: Q1FY26: CAD 296.9 Mn vs Q1FY25: CAD 517.1 Mn
Algoma Steel remains exposed to operational ramp-up risks associated with its EAF transition, elevated steel import tariffs, volatile steel pricing dynamics, and weaker shipment volumes amid oversupply conditions in North American steel markets
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 4.92 | 4.44 | 5.2 | 5.45 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
EAF Transition and Operational Transformation: Algoma Steel Group Inc. (NASDAQ: ASTL) completed its transition from traditional blast furnace steelmaking to Electric Arc Furnace (EAF) production during Q1 2026, marking the end of 125 years of coal-based operations. The Company’s EAF Unit 1 operated continuously on a 24-hour basis, supporting production of low-carbon Volta™ steel products and strengthening its positioning as Canada’s only discrete plate producer.
Strategic Focus on Plate Production: The Company accelerated its plate-first strategy during the quarter, focusing on higher-margin Canadian plate markets amid ongoing steel tariff pressures and oversupply in coil markets. Record plate sales of 116,000 NT were achieved, supported by strong demand from infrastructure, construction, and defence sectors. Algoma also continued scaling partnerships with Roshel and Hanwha Ocean to expand its participation in defence and shipbuilding supply chains.
Financial Performance Impacted by Transition Costs: Q1 2026 financial performance reflected elevated transition-related costs and lower shipment volumes as EAF operations ramped up. Revenue declined to CAD 296.9 million from CAD 517.1 million in Q1 2025, while net loss widened to CAD 159.4 million. However, Adjusted EBITDA loss improved to CAD 28.7 million from CAD 46.7 million in the prior-year quarter, supported by stronger pricing and improved product mix.
Liquidity Strength and Capital Discipline: Algoma maintained strong liquidity during the quarter with approximately CAD 553 million available, including cash balances, revolving credit availability, and government-backed tariff loan facilities. Capital expenditures declined significantly to CAD 20.4 million compared to CAD 127.0 million in Q1 2025 as major EAF construction activities neared completion, enabling the Company to redirect financial resources toward long-term growth initiatives.
Sustainability and Long-Term Growth Positioning: The Company’s EAF transformation is expected to reduce annual carbon emissions by nearly 70% while increasing annual raw steel production capacity to approximately 3.7 million tons. Algoma continues to strengthen its ESG profile through sustainable steelmaking initiatives, operational modernization, and strategic investments aligned with Canada’s infrastructure, energy, and defence priorities.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Algoma Steel Group Inc. (NASDAQ: ASTL) at the current market price of USD 4.92, as on 26 May,2026 at 7:25 am PDT
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Steel
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ASTL Algoma Steel Group Inc |
-0.08 1.43% | 5.53 | - | 7.01 | 0.24 | 1.39 | 0.70 | 89.64 |
| NUE Nucor Corp |
-0.73 0.28% | 257.73 | 9.01 | 14.84 | 1.21 | 2.11 | 1.21 | 5.42 |
| AMSYF ArcelorMittal SA |
- -% | 65.37 | 11.82 | 12.18 | 0.64 | 0.68 | 0.90 | 7.76 |
| PKX POSCO Holdings Inc |
-0.36 0.52% | 68.58 | 29.47 | 10.88 | 0.0004 | 0.68 | 0.0005 | 0.0057 |
| MT ArcelorMittal SA ADR |
-0.2 0.28% | 71.39 | 5.71 | 7.20 | 0.33 | 0.42 | 0.39 | 3.50 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on May 26, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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