U.S. steel stocks: Jefferies expects weak Q2 on lower prices and demand

Olympic Steel

17/07/2019 16:41

** Jefferies cuts price target on U.S. steel stocks saying
that excess supply and lower prices would hurt second-quarter
results
    ** Decidedly weaker quarter-over-quarter earnings are
factored into expectations given recently updated outlook by
Nucor  NUE.N , Steel Dynamics Inc  STLD.O  and United States
Steel  X.N , says Jefferies analyst Martin Englert
    ** AK Steel's  AKS.N  steel price sensitivity is pointing
towards 2019 guidance cut - Englert
    ** Jefferies sees opportunity for U.S. steel prices to
recover in H219, as supply and demand balance improves with
idled capacities, abating destocking, diminishing steel imports
and seasonal demand improvement
    ** "We advise investors to increase exposure to steel
equities with top U.S. picks NUE, STLD and Commercial Metals Co
 CMC.N ," says Englert
    ** AKS down ~3.6% at $2.21, NUE down ~1.43% at 54.76,
Olympic Steel Inc  ZEUS.O  down ~3% at $12.01, Ryerson Holding
Corp  RYI.N  down ~1.13% at $7.84, STLD down ~1.3% at $30.73,
TimkenSteel Corp  TMST.N  down ~5.7% at $7.51, and X down ~1.52%
at $14.88. Worthington Industries Inc  WOR.N , the lone steel
stock which saw a PT hike, was down ~0.15% at $39.15
    
    The changes in PT of companies are as below:
 Company Name                Ric         Previous PT  New PT
 AK Steel Holding Corp         AKS.N     $2.70        $2.30
 Nucor Corp                    NUE.N     $67.00       $63.OO
 Olympic Steel Inc             ZEUS.O    $16.00       $14.00
 Ryerson Holding Corp          RYI.N     $10.00       $8.75
 Steel Dynamics Inc            STLD.O    $41.00       $35.00
 TimkenSteel Corp              TMST.N    $12.00       $8.25
 United States Steel Corp       X.N      $18.00       $16.00
 Worthington Industries Inc    WOR.N     $38.00       $38.50
 
    

 (Reporting by Dominic Roshan K.L. and Ankit Ajmera in
Bengaluru)
 ((Dominic.RoshanKL@thomsonreuters.com;
Ankit.Ajmera@thomsonreuters.com))