Worthington Industries and Olympic Steel Fall Amid Credit Suisse Downgrade

Shares of Worthington Industries, Inc. WOR and Olympic Steel, Inc. ZEUS fell Tuesday amid downgrades by Credit Suisse.

Analysts led by Nathan Littlewood expressed concern over falling steel prices, which may not reach an inflection point until June.

The analyst report indicated that import volumes will have responded to lower prices, “mills will be better equipped for the next round of Trade Case war,” and there should be a price floor with the clearing of customer inventories by April or May.

Littlewood acknowledged, however, that the analysts do not know where the bottom is in the market and would prefer to avoid making any price forecasts.

The analysts regarded the management team at Worthington Industries as of “very high quality” but due to valuation concerns, the stock was downgraded from Overweight to Neutral and the price target was cut from $40 to $30.

The analyst report also noted that a general decline in the economy, continued declines in steel prices and weak end markets remained as risks for Worthington Industries.

Littlewood commented that Olympic Steel has “historically performed far worse than peers during periods of oversupply,” and the analysts were “nervous about the impact of plummeting steel prices on the company's inventory losses.”

The target price on Olympic Steel was cut from $19 to $12 and the stock was downgraded from Neutral to Underweight.

Worthington Industries recently traded at $26.79, down 12.51 percent.

Olympic Steel recently traded at $15.07, down 4.2 percent.