Nomura Securities on Steel: Reducing Estimates on Scrap Price Risks

June 22, 2012 8:54 AM EDT Send to a Friend
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Nomura Securities on Steel: Reducing estimates on scrap price risks.

Analyst, Curt Woodworth, said, "Service center destocking in the U.S. heading into the summer doldrums combined with sharply lower scrap prices have helped to drive down steel prices and production volumes. Given demand weakness in Europe, we believe scrap pricing will likely remain somewhat depressed in the near term to help steel pricing. However, our ISM Steel PMI survey indicates year-end sentiments are significantly better than consensus: only 21% of respondents indicate increasing orders in the next three months, 30% expect sales to rise over the next six months."


For U.S. Steel (NYSE: X) (Buy): F12E/F13E EPS from $3.20/$5.50 to $1.35/$3.30; vs Street $1.82/$3.22; PT from $40 to $32

Nucor (NYSE: NUE) (Buy): F12E/F13E EPS from $2.75/$4.50 to $2.20/$3.75; vs Street $1.97/$3.50; PT from $52 to $48

Steel Dynamics (Nasdaq: STLD) (Buy): F12E/F13E EPS from $1.10/$2.10 to $0.85/$1.70; vs Street $0.90/$1.53; PT from $19 to $18

A.K. Steel (NYSE: AKS) (Neutral): F12E/F13E EPS from $0.50/$1.30 to $0.05/$0.90; vs Street $0.02/$0.81; PT from $8 to $6




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