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UPDATE: UBS Securities Reiterates On Steel Dynamics On Columbus Potential


In a report published Tuesday, UBS Securities analyst Matt Murphy reiterated a Buy rating on Steel Dynamics (NASDAQ: STLD), and raised the price target from $21.00 to $23.00.

In the report, UBS Securities noted, “STLD expects Columbus to generate some $270M in EBITDA in 2015E or ~$90/t, as implied by the 6x EV/EBITDA (2015E) multiple STLD models in its $1,625M acquisition cost. We feel this is reasonable, and loftier targets are likely achievable over time; the addition of another $20M in synergies in 2016E could bring the total to $95/t. With time, STLD noted >$100/t levels could be sustained. If we assume STLD can sustain $110/t at Columbus (not too far a stretch from the $103/ton reported in Q1/14), this translates to $374M in EBITDA at full run-rates, $100M above 2015E.”

Steel Dynamics closed on Monday at $20.75.

Latest Ratings for STLD

May 2021Morgan StanleyMaintainsOverweight
Apr 2021B of A SecuritiesUpgradesNeutralBuy
Apr 2021Credit SuisseMaintainsOutperform

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