Credit Suisse Bends U.S. Steel, Downgrades to Underperform
In a report published Friday, Credit Suisse research analyst Nathan Littlewood downgraded United States Steel Corp. (NYSE: X) from Neutral to Underperform.
Littlewood noted that United States Steel Corp. has outperformed international peers including Tata Steel and ArcelorMittal (NYSE: MT). The analyst remarked that the company's outperformance is likely due to EM/DM exposure trade, but investors should note that this gap will close "at some point." Credit Suisse added that for US Steel to become even more competitive, the company would need to outperform peers on "cost reductions, yield enhancements, productivity gains or whatever else the process may involve."
Nathan Littlewood further commented on equity prices. He reported, "As we mentioned earlier; equity prices (particularly US Steel) seem to be overlooking recent commodity price weakness as a short-term destock related phenomenon. This is perhaps not surprising given that the 2012 collapse of iron ore to $87/t and subsequent rebound to $160/t is still relatively fresh in our minds. Unlike 2012 however, we believe that structural changes to the global ferrous S/D balance through the middle of the year will see commodity prices settle at a lower level in 2H2014 than they did post the 2012 destock shock."
Credit Suisse hold an unchanged $19.00 price target on United States Steel.
Shares of United States Steel Corp. closed at $24.40 on Thursday and are currently trading at $23.88, down 2.13 percent.
Latest Ratings for X
|Jan 2015||Goldman Sachs||Downgrades||Buy||Neutral|
|Jan 2015||Deutsche Bank||Maintains||Buy|
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.