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Citigroup reduced its rating on AK Steel
AKS from Neutral to Sell and lowered its price target from $5.50 to $3.50.
Citigroup said, "Our Sell recommendation is based partly on our steel price outlook but more importantly a further deterioration in our modeled negative free cash flow outlook. Currently we project FCF of -$405 mln in '12, -$40 mln in '13 and -$159 mln in '14. AKS' credit facility requires a fixed charge coverage ratio of 1:1 if credit facility availability falls below $138 mln. The company has not met its fixed charge coverage ratio requirement since 2007 but had ample credit facility availability of $672 mln as of the end of 2Q12."
AK Steel Holding closed at $5.25 on Friday.
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