UPDATE: Bank of America Cuts PO to $38 on Schnitzer Steel; Guidance Signals Challenges
Bank of America lowers its price objective on Schnitzer Steel (NASDAQ: SCHN) from $46 to $38 and reiterates its Neutral rating on shares.
Bank of America comments, "SCHN issued on Thursday a market outlook for its May quarter highlighting soft demand coupled with higher costs that promise to greatly impact FQ3 earnings. Mgmt expected operating income of $8-11/t in its main recycling operations, for the lowest margin since 2009 and far from its stated target of $30-40. It said tight raw material supplies and higher freight charges drove costs up, offsetting any benefit from a small rise in prices. Our sources have indicated scrap prices are under pressure, with export demand weaker and prices up to $20-30/t lower m/m."
SCHN closed at $32.34 on Thursday.
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