KeyBanc Downgrades US Steel (X) and Olympic (ZUES) to Hold; Lowers Price Target on Several Steel Stocks

October 10, 2008 10:09 AM EDT

KeyBanc downgrades U.S. Steel (NYSE: X) and Olympic Steel, Inc. (Nasdaq: ZEUS) from Buy to Hold. KeyBanc also initiates coverage on AK Steel (NYSE: AKS) with a HOLD rating.

KeyBanc lowers the price target on Dynamic Materials (Nasdaq: BOOM) from $45 to $30, Cleveland-Cliffs (NYSE: CLF) from $125 to $75, Gerdau Ameristeel (NYSE: GNA) from $17 to $12, GrafTech International (NYSE: GTI) from $35 to $25, Haynes International (Nasdaq: HAYN) from $80 to $50, Nucor (NYSE: NUE) from $75 to $60, Gibraltar Industries (Nasdaq: ROCK) from $25 to $18, Reliance Steel & Aluminum (NYSE: RS) from $75 to $40, Steel Dynamics (Nasdaq: STLD) from $35 to $20.

KeyBanc analyst says, "In the face of the current crisis, the carbon steel industry has responded to slower order momentum via aggressive supply curtailments, significantly accelerating the normal seasonal slowing of production to normalize industry-wide inventories, which we still believe remain manageable...Many of the names in our specialty steel universe have also been affected by the palpable halt in industrial momentum via more cautious end user buying patterns and reduced OE and after-market aerospace momentum, which has been exacerbated by the 33-day strike by the Boeing machinist union, as well as rapidly declining prices for many key alloying materials, including nickel and chrome."

United States Steel Corporation (U. S. Steel) is an integrated steel producer with production operations in North America and Central Europe.

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