Strong steel spreads, rally in prices seen supporting BlueScope Steel - MS

BSL

07/07/2021 06:01

** Morgan Stanley lifts price target on steelmaker BlueScope
Steel  BSL.AX  to A$27.00 from A$24.50, upgrades rating to
"overweight"
    ** Steel prices this year are propped up on demand fuelled
by post-pandemic recovery and supply shortages; China's pledge
to cut crude steel output is also supporting the prices
    ** MS sees strength in U.S. steel prices, and record steel
spreads in the U.S. and Asia benefiting BSL
    ** Expects trends seen in domestic demand for steel in 1H21
to have "strengthened through 2H21" and to continue into FY22
    ** Brokerage lifts earnings per share estimate for BSL by
11% for FY22 and 67% for FY23
    ** BSL has underperformed the S&P/ASX 200 Materials sector
 .AXMAJD  by 5.1 percentage points in the past one month
    ** Among 10 analysts that cover BSL, current average rating
is "buy"; five analysts rate it "buy" or higher, two "hold", and
two "sell" or lower - Refinitiv data
    ** Analyst mean price target is A$23.07
    ** BSL up 21.6% this year, as of last close, outpacing a
10.2% increase in the ASX 200 benchmark  .AXJO 

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