Is the Evraz Share Price a Bargain or a Value Trap?

Evraz share price has been under intense pressure in the past few weeks as the outrage of Russia’s invasion of Ukraine continues. EVR stock is trading at 80.88p, about 87% below the highest point this year.In addition, its market capitalization has crashed to about 1.5 billion pounds, which is significantly lower than its all-time high.

Evraz is a Russian company whose biggest shareholder is Roman Abromavic, the sanctioned owner of Chelsea. The company is in the commodity business, with its top products being steel and coal. It is also a top player in the chemicals industry.

Evraz latest news

Before the current conflict in Ukraine, Evraz business was doing well as the global economy recovered. This recovery led to more global demand for its products and higher prices. In its most recent report, the company said that its total revenue in 2021 rose to over 14 billion while its net income jumped to more than 3.1 billion. Evraz also managed to lower its total debt to about 2.66 billion. In the past few weeks, however, the Evraz share price has cratered. The same has happened among other Russian listed companies like VTB and Sberbank, which have fallen by over 98%.

In addition to sanctions, the stock has been dumped by index funds. Still, while Evraz faces significant challenges navigating the current sanctions, the company has become incredibly cheap since the worst has likely been priced in. Also, it will likely continue doing business in Russia and in other countries like China. Also, it could benefit from the rising prices of key items like steel.

Evraz share price forecast

The daily chart shows that the EVR share price has collapsed in the past few weeks. As a result, it has managed to drop below all moving averages while the Relative Strength Index has moved below the oversold level. The Average True Range (ATR) has risen in a sign of growing volatility.

Therefore, at this stage, there is a likelihood that the Evraz share price will remain under pressure as sellers target the next key support at 50p, which was the YTD low. In the long-term, the shares will likely bounce back as investors buy the dip.