Market Overview

AK Steel Holdings Falls Sharply After Downgrade

Share:
Related AKS
Bob Pisani Talks Recent Slew Of Strong Earning Reports, Debt Reductions And Energy Stocks
Earnings Scheduled For April 26, 2016
AK Steel Announces Price Increase for Carbon Steel Products (GuruFocus)

AK Steel Holdings (NYSE: AKS) has decreased about 13% on the session. As stated in a Wall Street Journal Article, Goldman Sachs (NYSE: GS) downgraded AKS from a Neutral to a Sell rating. Goldman Sachs may have downgraded AKS because of a highly leveraged balance sheet, having $1.1 billion in debt compared to $576 million in equity. AKS only has $42 million in cash, making it difficult to pay off debt.

According to a Wall Street Journal Article, Goldman Sachs stated, “Half way through 2012, it is becoming evident that this is shaping up to be a tough year for the steel sector, and 2H could get even tougher, especially for flat rolled products."

China's daily steel output has decreased in May, which has led to a decrease in the demand for steel. The decrease of the price of steel in China could be having a negative effect on the steel sector and a contributing factor to the low prices in flat steel. Competitors of AKS such as, United States Steel (NYSE: X), Nucor Corporation (NYSE: NUE), and Steel Dynamics (NASDAQ: STLD), have all seen losses on the day.

AK Steel Holdings is currently trading at about $5.06.

Posted-In: Earnings News Best of Benzinga

 

Related Articles (AKS + GS)

View Comments and Join the Discussion!