CSN & CMIN: Model Update

Research evidence excerpt

CSN & CMIN: Model Update

Rodolfo Angele, CFA AC Latin America Equity Research

(55-11) 4950-3888 17 July 2026 J P M O R G A N

rodolfo.r.angele@jpmorgan.com

Investment Thesis, Valuation and Risks

CSN (Neutral; Price Target: R$8.00)

Investment Thesis

We rate CSN Neutral with a Dec 2026 price target of R$8.0/sh, as we see a balanced

valuation with steel improving results with antidumping measures, while the mining

operations are impacted by freight costs and higher costs. Additionally, the company’s

balance sheet already carries more debt than its peers (4.8x ND/EBITDA 2026e adjusted for

pre-payments). Even though we expect prices of iron ore to trend lower into 2026, the

mining business should continue to be a key performance driver for the company.

Valuation

We base our Dec 2026 price target of R$8.0/sh on a 10Y DCF, assuming a BRL WACC of

9.9% and a 4.0% growth rate in perpetuity. This reflects a 5.1x EV/EBITDA multiple, in line

with forward multiples. We do not have a price target on the CSN ADRs.

Risks to Rating and Price Target

The main risks to our rating and price target are related to iron ore prices, domestic steel

market demand, and steel prices. A weaker economic outlook in Brazil could negatively

affect local demand, resulting in lower volumes and downward pressure on steel prices. In

addition, should global steel prices decrease and/or raw material costs (especially coking

coal) increase more than our forecasts, the company’s performance may be weaker than

estimated. A stronger-than-expected BRL could increase imports into Brazil and affect the

company’s ability to pass through price increases, impacting results. Finally, lower iron ore

prices than forecast could negatively impact the company’s profitability. On the other hand,