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UPDATE: Goldman Sachs Downgrades Schnitzer Steel Industries to Sell on Structural Industry Challenges

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Goldman Sachs lowered its rating on Schnitzer Steel Industries (NASDAQ: SCHN) from Neutral to Sell and reduced its price target from $24 to $21.

Goldman Sachs noted, "We downgrade SCHN to Sell from Neutral with 28% potential downside to our new P/E and EV/EBITDA based $21 price target (vs. 2% upside for the coverage group). We cut our FY2013 estimate by 25% (to $1.50 from $2.00) on lower margin and volume assumptions. We believe issues of shredder overcapacity, which has depressed margins for the industry, are now also impacting SCHN at its lucrative West Coast market. We see competition getting fiercer in the East Coast, too. 2013 consensus estimates for SCHN are too high, in our view, implying doubling of earnings while global steel fundamentals indicate only modest growth in steel production next year."

Schnitzer Steel Industries closed at $29.08 on Friday.

Latest Ratings for SCHN

DateFirmActionFromTo
Oct 2017Morgan StanleyMaintainsEqual-Weight
Sep 2017MacquarieInitiates Coverage OnNeutral
Nov 2015Morgan StanleyUpgradesUnderweightEqual-Weight

View More Analyst Ratings for SCHN
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Posted-In: Goldman SachsAnalyst Color Downgrades Pre-Market Outlook Analyst Ratings

 

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