BlackRock Reduces Stake in Usiminas as Stock Faces 30% Decline

BlackRock has strategically reduced its ownership in Usiminas (USIM5) to 4.928%, now holding 26.9 million class A preferred shares. The investment giant maintains its position purely for investment purposes, without seeking control changes or administrative restructuring.

The steel manufacturer’s stock has experienced a significant decline of 32% this year. Despite this downturn, Morgan Stanley sees potential upside, upgrading their recommendation to overweight with a target price of R$9.7 ($1.73).

The stock currently trades below industry averages, presenting a unique opportunity for value investors. Cost reduction initiatives could address market concerns that previously drove the stock price down. Morgan Stanley believes investors have become overly pessimistic about potential gains from the blast furnace renovation project.

The company’s valuation metrics show interesting dynamics. Usiminas trades at an EV/EBITDA ratio of 4.8x for 2025, matching its historical average but sitting 23% below its weighted peer average. This suggests potential undervaluation compared to industry competitors.

Morgan Stanley’s analysts suggest that even partial success in achieving promised efficiencies could trigger significant stock appreciation. The current market sentiment appears to undervalue potential operational improvements and cost-saving measures.

The steel manufacturer faces both challenges and opportunities ahead. While BlackRock’s reduced stake might raise concerns, Morgan Stanley’s upgraded outlook points to possible recovery scenarios based on fundamental improvements.

BlackRock Reduces Stake in Usiminas as Stock Faces 30% Decline

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