Credit Suisse Says U.S. Steel Has 'Something For Everyone'

In a report published Thursday, Credit Suisse analysts maintained an Outperform rating on

, with a price target of $40. In the report Credit Suisse noted, "We continue to see long-term appeal in X shares around a portfolio rationalization / self-help story of unparalleled magnitude in the US Metals & Mining space. Shorter term appeal is also increasing; as we anticipate an end-market restock cycle moving into summer, lower import volumes, falling service center inventories and trade cases all appear likely to support steel prices through the balance of 2015." The company reported its March quarter results significantly short of expectation. The analysts cites the "culprits" for the miss as rig count, steel prices, imports and currency. The company has been making "good progress" both in portfolio rationalization and cutting costs. On a short-term basis, the analysts believe investors are right to focus on the price outlook and trade cases as important inputs in the decision to own (or not own) the company's shares. "What sets this business apart from its peers is less about its assets, and more about the way the assets are being managed – in our view. Benchmarking X's profitability and valuation to similar business models internationally suggests tremendous scope for improvement," the analysts added.