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Bank Of America Bullish On Steel

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Analysts at Bank Of America raised price targets on AK Steel (NYSE: AKS) to $13 from $11 and Steel Dynamics (NASDAQ: STLD) to $26 from $23. The firm also reiterated Buy ratings on both companies.

Analysts lifted steel forecasts for H214, but reiterate conviction that prices will correct with excessive global supply and with restarting domestic capacity.

During the second quarter conference call, AK Steel management guided to better third quarter results, primarily on better shipments due to weather disruptions. AK Steel also assumes a $1.8 billion operating loss carryover that will be applied to the planned purchase of Severstal’s Dearborn facility, expected to close by the end of the year.

AK Steel reported EPS of $0.02 versus -$0.03 estimated for the second quarter, with revenues of $1.53 billion.

Shares of AK Steel traded recently at $10.65, down two percent.

Analysts at Bank Of America see upside in shares of Steel Dynamics as well. Timna Tanners stated, “Our Q3 estimates show sharp improvement q/q on better prices and lower costs in U.S. flat-rolled and better margin assumptions in Tubular.”

In addition, the agreed purchase of Severstal’s Columbus facility could add $0.30 to $0.35 to 2015 EPS forecast of $1.65 a share.

Steel Dynamics reported EPS of $0.31, in line with estimates, and revenue of $2.07 billion versus $1.99 billion estimated.

Shares of Steel Dynamics traded recently at $23.20, down 1.2 percent.

Latest Ratings for AKS

Sep 2017MacquarieInitiates Coverage OnOutperform
Aug 2017BarclaysMaintainsEqual-Weight
Jul 2017Longbow ResearchDowngradesBuyNeutral

View More Analyst Ratings for AKS
View the Latest Analyst Ratings

Posted-In: Bank of America Timna TannersAnalyst Color Price Target Reiteration Analyst Ratings


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