Citi sees EPS & output accretion from Bluescope Steel's U.S. acquisition

Core Natural Resources

11/04/2022 20:58

** 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 building products manufacturer Cornerstone Building Brands
 CNR.N 
    ** Says the $500 mln (A$673.40 mln) acquisition acts as an
opportunity to lift co's output as the business will add ~900
kilo-tonnes per annum (ktpa) coating capacity to BSL’s current
U.S. capacity of 475 ktpa
    ** Adds the purchase provides immediate access to the
growing Eastern US region, near-term synergies, and potential
for medium to longer-term growth through facility upgrades,
product development, and branded products 
    ** Citi says the Coil Coatings business is the second
largest provider of metal coil painting services in the U.S., 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
    ** Nine of 10 analysts rate the stock "buy" or higher and
one "hold"; their median PT is A$23.6 – Refinitiv data
    ** Stock has fallen 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 in Bengluru)
 ((Roushni.Nair@thomsonreuters.com;))