UPDATE: UBS Investment Research Downgrades United States Steel Corporation on Mixed Factors
In a report published Tuesday, UBS Investment Research analyst Matt Murphy downgraded the rating on United States Steel Corporation (NYSE: X) from Buy to Neutral, but raised the price target from $22.00 to $25.00.
In the report, UBS Investment Research noted, “As an integrated steel producer, X has been burdened by high fixed costs in the weak steel markets of recent years and high legacy liabilities due to low discount rates. We expect US Steel to benefit from reduced pension liabilities in 2014, while also improving margins through cost reduction and revenue maximization efforts currently underway. However, we remain concerned about increasing competition in X's most profitable segment, Tubular goods, and we only see sector capacity utilization reaching higher levels in 2016, meaning margins could remain weak in the medium term. We rate US Steel a Neutral and our $25 PT is based on a 7.0x EV/EBITDA (2015) multiple.”
United States Steel Corporation closed on Monday at $24.01.
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