Forecasting the fair value of MMK shares in the context of macroeconomic and geopolitical uncertainty (2026-2027)

Abstract

This study is a comprehensive systematic analysis of the factors determining the fair value of shares of PJSC Magnitogorsk Iron and Steel Works (MMK) in the context of macroeconomic and geopolitical uncertainty on the horizon of 2026-2027. The paper provides a detailed study of the transformation of key endogenous and exogenous determinants, including the monetary policy of the Bank of Russia, sanctions restrictions from the United States and the EU, the dynamics of global commodity prices, industry costs, as well as the financial performance of the issuer itself (capacity utilization, debt burden, free cash flow). Special attention is paid to the analysis of the impact of geopolitical shocks (export discount, equipment import bans, carbon regulation) on the operating margin and investment attractiveness of the company. As part of the research, a hybrid multifactor model based on machine learning methods (ensemble algorithms, tensor convolution of sanctions events, analysis of alternative data – search trends and news sentiment) was developed and verified, demonstrating high predictive accuracy (MAPE 6.9%). Based on scenario modeling and 15,000 Monte Carlo simulations, the probabilistic ranges of the target price of MMK shares for 2026 and 2027 have been determined, taking into account stressful and favorable scenarios. In the final part, a differentiated investment strategy is formulated, taking into account the current market conditions, risk/return asymmetry and recommendations for different categories of investors.