Deutsch Bank Raises Price Targets on Steel & Service Center Names (AKS) (NUE) (RS) (RYI) (STLD) (X)

Deutsche Bank analsyt Jorge Beristain rebased his price targets for Steel & Service Center coverage names to reflect estimates of $600/st for 2017 and 2018E vs $500/st and $550/st, prior.

• AK Steel (NYSE: AKS) price target was raised to $10 from $6.
• Nucor (NYSE: NUE) price target was raised to $73 from $55.
• Reliance Steel (NYSE: RS) price target was raised to $95 from $78.
• Ryerson Inc. (NYSE: RYI) price target was raised $18 from $14.
• Steel Dynamics (NASDAQ: STLD) price target to $42 from $31.
• U.S. Steel (NYSE: X) price target to $40 from $24.

"Given extreme share price/steel moves this report provides "real time" forecast updates and fresh sensitivities to steel pricing. Steel & Service Center coverage names have spiked 38% in the past month, while US Hot Rolled Coil (HRC) pricing is now at $600 per short ton (+30% over same period). We have rebased our PT's for Steel & SC to reflect $600/st for 2017E and 2018E vs $500/st and $550/st, prior. Pricing benefits will mostly flow to the bottom line as US mills face a more favorable cost outlook than global peers. Post-Trump's win, renewed investor focus on Steels appears to support near-term momentum. As such we raise our PTs an average of 42% and re-iterate Buys," said Beristain.

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