Metlen is securely on track to fully recover its operational profitability for the entire year, targeting €1 billion to €1.15 billion. The direct references made during the annual general meeting regarding favorable global aluminum conditions and the newly restructured energy division were certainly not accidental. Beyond the robust financial returns expected to manifest in the first half of 2026, the upcoming year will see the launch of Metlen’s circular metals production and its brand-new alumina refinery, alongside one of Europe’s largest operational energy storage facilities, boasting a capacity of 330 MW. Corporate sources indicate that the strategic target of reducing the leverage ratio to 2 will be met by the end of the year, driven by anticipated asset sales that will significantly boost cash flows. Amid volatile geopolitical conditions shaping international energy prices, Metlen Chairman Evangelos Mytilineos outlined the group's next expansion phase across the energy, metals, and defense sectors, which includes forging new international partnerships with entities such as EDF and PPC.
The aluminum market
Global aluminum prices could surge toward $4,000 per ton, according to a recent market analysis by Citigroup. The banking institution identifies aluminum as the primary outperformance catalyst for the stock, with the most substantial financial benefits arriving in 2027 due to forward production sales, maintaining a target price of €52. Mr. Mytilineos, a veteran expert in the commodities sector, estimates that the aluminum market has staged a massive rally, noting that millions of tons of supply are missing from the global market, meaning it will require significant time to rebalance.
Consequently, Metlen has secured exceptionally high prices through strategic hedging positions covering the next 2.5 years and will maintain this tactical momentum. Even when the broader market retreats to $2,200, the company will remain positioned significantly higher. During the first quarter, the aluminum segment contributed just €234 million (a 3% increase) to a total turnover of €2 billion, yet the impact of elevated pricing will be fully reflected in the first-half operating profits. Furthermore, Metlen plans to directly link its energy storage systems with its aluminum production facilities, a move projected to slash annual energy costs by €150 million to €200 million. The company is actively developing one of the largest energy storage projects in Europe, a 330 MW facility in Larissa, and the Chairman noted that capital expenditures will accelerate to capitalize on anticipated supply gluts.
Energy – Infrastructure – Joint investment with EDF?
Metlen’s diversified business model allows it to absorb macroeconomic fluctuations in international commodity markets more effectively, according to a report by Morgan Stanley, an advantage expected to positively influence the stock performance in the second half of 2026. Morgan Stanley has issued a target price of €55, implying a potential upside of approximately 44% from current trading levels. First-quarter revenue from the energy division rose by 6% to €997 million, buoyed by elevated natural gas prices that drive wholesale electricity costs, meaning Metlen’s vertically integrated international model is well-positioned to amplify corporate earnings.
Following the strategic reorganization of M-RESET with the renewable energy portfolio, asset rotation initiatives, grid developments, and data center projects, the finance department expects upcoming project sales to optimize cash flows and aggressively reduce debt levels. Furthermore, during high-level executive meetings with EDF, it became clear that the French utility giant seeks to share operational risks by evaluating joint investment opportunities with Metlen; these extend beyond traditional energy construction into data centers and nuclear reactors.
While Mr. Mytilineos did not disclose a specific project framework with EDF, the utility's expanding presence in Greece and wider Europe leaves ample room for strategic cooperation. Regarding data centers, there is a distinct possibility of partnering with PPC on large-scale initiatives, such as the major project in Kozani. Concurrently, the prospect of an initial public offering for METKA will provide the construction arm with the capital required to aggressively pursue concessions and infrastructure projects, while a new business activity is reportedly being structured. METKA’s first-quarter contribution was highly impressive, with revenues surging 92% to €177 million.
Outlook for circular metals, gallium, and alumina
The year 2027 will mark the inaugural operational phase for the comprehensive strategic roadmap presented prior to the company's listing on the London Stock Exchange. In the circular metals division, the pilot production plant in Sindos is approximately 65% complete, aiming for a launch in the first quarter of 2027 to initiate the initial production of copper, nickel, cobalt, and zinc oxides. The primary competitive advantage stems from the fact that this production technology is the proprietary output of research conducted by the Greek firm, led by George Mytilineos.
The outlook for gallium production is exceptionally encouraging, with initial demand registering 50 times higher than the company's maximum supply capacity. The plant is projected to become fully operational by late 2027. Anticipated operating profits from this segment, including gallium, are estimated at €260 million, eclipsing the traditional aluminum sector and underscoring its financial significance. By late 2027, the expansion of the alumina refinery will be complete, boosting annual production to 1,25 million tons from 865,000 tons, ensuring the company is optimally positioned to exploit the structural deficit in the global commodities market.
At the equity level, management's firm message that it possesses insights hidden from short sellers could trigger high-demand dynamics for the shares, particularly when aligned with the company's structured share buyback program. Regarding the stock’s trajectory, all market indicators suggest that a target price of €42.5 to €44 remains highly realistic in the near term as short positions continue to cover.
Dimitris Pafilas
dpafilas@yahoo.com
www.bankingnews.gr
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