J.P. Morgan Says Steel Industry Poised For Upturn (X)

J.P. Morgan Chase & Co. is positive on the steel sector, saying it is well positioned for an upturn. It covers U.S. Steel in the report, and has an Overweight rating, along with a $63 price target on shares. In the research note sent to clients, J.P. Morgan says, "We are lowering our estimates and price targets for the North American steel producers to reflect a push out in an expected demand rebound and the impact this will likely have on steel prices and the companies' fixed cost absorption. However, we retain our favorable long term view on the U.S. steel industry, and believe their cost advantages and production discipline will position them well for an eventual demand upturn. X and MT remain our top picks in the group despite the near-term earnings pressure given their higher levels of raw material integration and fixed costs, which should give them the most earnings leverage to rebounding demand." Shares of X are up 40 cents in pre-market trading to $42.82.