Voestalpine Shares Surge on European Trade Policy Tailwinds

Shares in Austrian steelmaker Voestalpine have delivered a staggering return, effectively doubling in value over the past twelve months. Trading near €38, the stock is hovering close to its 52-week peak. This powerful rally is being fueled primarily by new European Union trade defense instruments designed to shield regional producers. Market participants are now questioning the durability of this upward momentum.

Despite facing sector-wide headwinds, Voestalpine's underlying financial health appears robust. For the first half of the 2025/26 fiscal year (April to September 2025), the group reported revenue of €7.6 billion, representing a 5.6% decline. However, operational performance showed strength: EBITDA saw a modest increase to €722 million, while net profit after tax climbed 8.6% to €199 million.

The company's balance sheet strengthened significantly, with net debt falling to €1.5 billion. The gearing ratio dropped to 19.5%, marking its lowest point since the 2006/07 period.

Key Financial Metrics:
* Market Capitalization: €6.5 billion
* Price-to-Earnings Ratio (P/E): 34.15
* Price-to-Book Ratio (P/B): 0.89
* Free Cash Flow: €296 million

These results come against a backdrop of ongoing restructuring. The firm is cutting approximately 340 positions and reducing shift operations at its Kindberg and Mürzzuschlag sites. Its tubular business continues to feel pressure from U.S. tariffs, and the total workforce has decreased by 4.1% to 49,600 employees.

Should investors sell immediately? Or is it worth buying Voestalpine?

EU Protectionism: A Structural Shift for Steel

The core driver for the sector's re-rating is the full implementation of the EU's Carbon Border Adjustment Mechanism (CBAM). Since January 1, 2026, importers of steel have been required to purchase CO2 certificates at EU price levels, making third-country imports substantially more expensive. For Voestalpine, this translates to reduced price competition from cheaper producers in Asia and elsewhere.

This effect will be amplified in July 2026, when the EU is set to slash import quotas by 50% to 18.3 million tonnes. Market experts believe these protectionist measures will stabilize steel prices and enhance margin potential for European manufacturers.

This optimistic outlook is reflected in recent analyst upgrades. JPMorgan revised its rating to "Overweight" with a price target of €40.60, while UBS moved to a "Buy" recommendation, seeing a realistic path to €43. From the current €38 level, this implies a further potential upside of around 13%.

Automotive Sector Provides a Lever

A significant portion of Voestalpine's steel division revenue—approximately 40%—is derived from the automotive industry. A notable development is underway in annual contract negotiations with carmakers: for the first time in two years, price increases appear achievable. Industry insiders estimate potential surcharges could reach about €100 per tonne, a lever that could meaningfully boost profitability.

The company's management has reaffirmed its guidance for the full 2025/26 fiscal year, anticipating an EBITDA between €1.40 billion and €1.55 billion. The market's next insight will come with the quarterly results scheduled for February 11, 2026, which may reveal the early financial impact of the evolving EU trade landscape.