Moody's Ratings Downgrades Algoma Steel Group Inc. (ASTL) from B3 to Caa1; Keeps Negative Outlook

With a price-to-earnings multiple under 15x and its relative strength index below 40, Algoma Steel Group Inc. (NASDAQ:ASTL) secures a spot on our list of the 13 Oversold Value Stocks to Invest in Now.

Moody’s Ratings downgraded Algoma Steel Group Inc. (NASDAQ:ASTL)’s corporate family rating to Caa1 from B3 on August 14, 2025, keeping a negative outlook. This downgrade follows the company’s weak operating results, heavy cash burn, and risks from U.S. steel tariffs.

Furthermore, the agency also downgraded Algoma Steel Group Inc. (NASDAQ:ASTL)’s senior secured second lien notes from B3 to Caa1 and its speculative-grade liquidity rating from SGL-2 to SGL-4. Looking ahead, Moody’s expects negative EBITDA through fiscal 2026, implying a liquidity crunch for the company. This expectation arises despite ASTL’s $360.57 million loan application under Canada’s Large Enterprise Tariff Loan program. While government support could ease the situation for the company, higher leverage, tariff pressures, and execution risks associated with its Electric Arc Furnace project continue to temper credit quality.

Algoma Steel Group Inc. (NASDAQ:ASTL) manufactures and sells flat and plate steel products, serving automotive, construction, energy, and industrial markets in North America and the rest of the world. It is one of the oversold stocks.

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