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Salzgitter (XTRA:SZG) Could Be 28% Undervalued As UBS Backs EU Steel Safeguards

Simply Wall St · 2d ago

UBS Global Research has just added Salzgitter (XTRA:SZG) to its Top 20 list of European small and mid-cap stocks, pairing that move with a positive rating linked to tighter EU steel safeguards.

In the short term, Salzgitter has given back some ground, with the share price falling 12.2% over the past month and 12.9% over the past quarter to €48.24. However, the year-to-date share price return is 7.8% and the 1-year total shareholder return is 71.6%, which points to strong longer term momentum despite the recent weakness.

Scan other potential beneficiaries of tighter EU steel safeguards by reviewing our hand picked list of 191 high quality undervalued stocks in addition to Salzgitter.

After a sharp run over the past year and a recent pullback, Salzgitter now sits between two narratives. Has most of the easy money already been made, or does the current valuation still leave meaningful upside on the table?

Most Popular Salzgitter Narrative: 28% Undervalued

On the most widely followed view, Salzgitter is priced at €48.24 against a narrative fair value of €67. This frames the recent pullback as a move away from that reference point rather than toward it.

Ongoing SALCOS and green steel initiatives position Salzgitter to capture emerging 'green premium' pricing and build resilient, higher-margin revenue streams as regulations and customer preference shift toward low-CO₂ steel, directly benefiting future net margins and margin stability.

See why 6 investors see Salzgitter as 28% undervalued.

Result: Fair Value of €67 (UNDERVALUED)

Still, the bullish Salzgitter story can unravel if record European steel imports persist or if regulatory support like CBAM and grid fee relief arrives later than expected.

Find out about the key risks to this Salzgitter narrative.

Another Way to Look at Salzgitter’s Valuation

The story so far leans on future earnings and fair value at €67. Yet on simple earnings multiples, Salzgitter looks expensive. The current P/E of 46.5x is more than triple the European Metals and Mining industry at 14.3x and far above peers at 10.7x.

The fair ratio sits at 41.2x, below where the shares trade today. That gap points to valuation risk if sentiment cools, even with growth forecasts in place. Which signal do you treat as more important: the earnings narrative or the rich multiple?

See what the numbers say about this price — find out in our valuation breakdown.

XTRA:SZG P/E Ratio as at Oct 2026
XTRA:SZG P/E Ratio as at Oct 2026

Next Steps

Mixed messages on Salzgitter’s valuation and risk profile make this a judgment call, so move quickly to review the full picture including 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond Salzgitter?

If Salzgitter has your attention, do not stop here. Use this momentum to broaden your watchlist and pressure test your thesis against fresh opportunities.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.