Goldman Sachs Lowering Estimates On Schnitzer Steel Industries

Goldman Sachs is lowering its earnings estimates on Schnitzer Steel Industries

. It has a Neutral rating and a $68 price target on shares. In a note to clients, Goldman Sachs writes, "We are lowering SCHN's FY4Q2011 estimate to $1.31 from $1.36 as we believe higher scrap purchase costs could have some impact on margins despite being partially offset by higher volumes. The company reported FY3Q2011 EPS of $1.17, better than our estimate of $1.16. Due to these changes, our FY2011 estimate is now $4.22 from $4.26. There is no change to FY2012/13/normalized estimate at $5.50/$6.20/$6.00. We maintain our 6-month target price based on CY 2011 P/E and EV/EBITDA at $68. Although we maintain our Neutral rating on SCHN as we see better near-term upside in our Buy-rated names, ATI, STLD, FCX and AA, it is one of our favorite long-term investment ideas on the back of our long-term constructive view on scrap. We believe that scrap supply will lag the growing demand from emerging economies for the foreseeable future." Shares of SCHN gained $1.16 yesterday to close at $57.60, a gain of 2.06%.