KeyBanc Downgrades Metals USA (MUSA) to Hold; Reduced Macro Visibility, Weaker Spread Recovery Unfolding

KeyBanc downgraded Metals USA (NYSE: MUSA) from Buy to Hold.

KeyBanc analyst says, "Companies most in need of a metal spread catalyst, possessing significant debt leverage, and operators without meaningful supply chain integration will likely remain in the penalty box until more constructive supply-demand fundamentals prevail for the sector. In that vein, we reducing our ratings on AK Steel (NYSE: AKS) and Metals USA to HOLD from BUY, given subdued near-term metal spreads, lower than normal transparency, and high leverage ratios. We also reiterate our HOLD rating on Olympic Steel, Inc. (NASDAQ: ZEUS) via its recent re-leveraging and accompanying higher financial risk profile. We believe shares of Nucor Corporation (NYSE: NUE) will be a neutral safe haven for investors (dividend yield, rock solid balance sheet) over the near term, but we do not see meaningful near-term catalysts to drive sustained equity appreciation in shares via increased likelihood of further miasma in construction markets."

For more ratings news on Metals USA click here and for the rating history of Metals USA click here.

Shares of Metals USA closed at $12.49 yesterday.

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