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How was the steel price of $650 per ton calculated based on the forward-looking enterprise value-to-Ebitda in this Bloomberg news article?

https://www.bloomberg.com/news/articles/2018-03-23/tariff-triggered-rout-in-steel-stocks-opens-up-unusual-value-gap

Case in point: U.S. Steel Corp., one of the country’s biggest producers. Its shares are trading at 4.4 times forward-looking enterprise value-to-Ebitda after tumbling 25 percent this month, matching the NYSE Arca Steel Index’s decline. That implies a hot-rolled coil steel price of about 650 per ton.Futures prices as of March22 were around 825 per ton.

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    $\begingroup$ Equity analysts build models for each company (in an Excel spreadsheet), where the price per ton determines revenue, which determines EBITDA. They observe Enterprise value, subject to a lot of assumptions they come up with this kind of estimate. I don't know all the details of these generally proprietary models. $\endgroup$ – Alex C Mar 25 '18 at 2:27
  • $\begingroup$ @Alex C, thanks for the comment. I thought there was some academic quantitative finance formula to calculate the steel price. If it was based on discretionary financial models, then the final number is not really meaningful. Anyone can create their own models and come out with a number to convince themselves something is cheap if they feel like buying anyway. Lack of objectivity. $\endgroup$ – curious Mar 25 '18 at 3:37

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