As part of its sector report on metals ahead of 2026, Morgan Stanley maintains a positive stance on Metlen, despite targeted revisions incorporated into its valuation model. The bank proceeds with technical adjustments to both the price target and short-term estimates, without changing its overall investment view on the stock.

Specifically, Morgan Stanley lowers its price target for Metlen to €64 from €66, taking into account the latest data from the third-quarter 2025 trading update, revised assumptions on metal prices, foreign exchange rates, and adjustments to fourth-quarter forecasts. The reduction in the price target is described as limited and is not accompanied by a change in recommendation, with the stock remaining rated overweight.

The revisions also extend to profitability forecasts. For 2025, Morgan Stanley cuts its estimate for operating earnings by around 5%, to €986 million. For 2026, the adjustment is marginal, with a reduction of about 1%, and operating earnings are estimated at €1.25 billion. For 2027, estimates remain essentially unchanged at €1.43 billion, indicating that the revisions mainly affect the short-term outlook.

A similar picture is reflected in earnings per share. Morgan Stanley reduces its EPS estimate by approximately 4% for 2025, applies a marginal 1% decline for 2026, while forecasts for 2027 remain stable. These revisions are linked to technical model assumptions rather than a change in the company’s fundamental outlook.

A key element of the analysis is the three valuation scenarios for the stock. In the bearish scenario, Morgan Stanley values Metlen at €30, incorporating lower valuation multiples and more adverse assumptions for metal prices. In the base case, which reflects the bank’s updated estimates, the price target stands at €64. In the bullish scenario, the valuation rises to €85, assuming higher metal prices and a more favorable valuation of operating profitability.

In terms of valuation metrics for the 2025–2027 period, Metlen shows a clear decline in multiples. The stock trades at 10.1x EV/EBITDA in 2025, falling to 8.1x in 2026 and 6.8x in 2027, reflecting improving operating profitability. At the same time, the P/BV ratio declines from 1.8x in 2025 to 1.5x in 2026 and 1.3x in 2027, while free cash flow yield remains at particularly high levels, close to 18%–20% over a three-year horizon.

Overall, Morgan Stanley presents Metlen as having an investment profile with a wide valuation range, limited short-term revisions and sustained medium-term momentum, as outlined in its 2026 metals sector report.