UPDATE: DA Davidson Downgrades Schnitzer Steel Industries to Underperform; Weak MRB Margin Outlook

DA Davidson downgrades Schnitzer Steel Industries

from Neutral to Underperform and reduces its price target from $40 to $26. DA Davidson notes, "As anticipated, yesterday afternoon Schnitzer Steel provided an outlook for its third fiscal quarter, ending May 31st. Schnitzer does not provide specific earnings guidance although does provide expectations for its business segments. Of particular note, the company expects Metals Recycling Business (MRB) operating margins to be in a range of $8-$11 per ton. This comes after indicating on its April 5th conference call margins in MRB were trending above levels achieved in Q2 ($15 per ton). Softening market/pricing conditions since early April appear to have more than offset positive trends experienced earlier in the quarter." SCHN closed at $26.26 on Friday.