UPDATE: Bank of America Downgrades Schnitzer Steel to Underperform on Risk/Reward

Bank of America reduced its rating on Schnitzer Steel

from Neutral to Underperform but raised its price target from $28 to $31. Bank of America commented, "We downgrade SCHN to Underperform from Neutral, after a strong run we think is unjustified. Higher Aug scrap prices are unlikely to translate to better earnings, in our view, and still weak exports can also limit profit recovery. Lower iron ore and met coal prices can limit scrap strength. We raise our PO to $31 from $28 as we shift our valuation to F2013 EV/EBITDA and a DCF, but think shares still look rich." Schnitzer Steel closed at $32.41 on Friday.