Analysts sees earnings, output accretion from Bluescope Steel's U.S. deal

BSL

12/04/2022 05:28

(Updates with Morgan Stanley comments)
    ** Citi sees Bluescope Steel  BSL.AX  clocking near-term
valuation upsides and modest EPS impact after the Australian
steelmaker recently acquired Coil Coatings business from U.S.
based Cornerstone Building Brands  CNR.N 
    ** Brokerage says $500 mln acquisition acts as opportunity
to lift co's output as business will add ~900 kilo-tonnes per
annum (ktpa) coating capacity to BSL's current U.S. capacity of
475 ktpa
    ** Adds purchase provides immediate access to the growing
Eastern U.S. region, near-term synergies, and potential for
medium to longer-term growth
    ** Analysts at Morgan Stanley see upside to base revenues
and synergy target if BSL can capitalise the capacity base
    ** Citi says Coil Coatings business is an advantage in a
growing sector where BSL has lagged key U.S. steel peers
    ** Brokerage stays "buy" rated on BSL with an unchanged
price target of A$25.0; MS rates BSL "overweight" with price
target of A$25.0
    ** Nine of 10 analysts rate the stock "buy" or higher and
one "hold"; their median PT is A$23.6 – Refinitiv data
    ** BSL down 0.8% this year, as of last close, vs a 0.6%
increase in the benchmark S&P/ASX 200 index  .AXJO  

(1 Australian dollar = $0.7425)

 (Reporting by Roushni Nair and Sameer Manekar in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))