DA Davidson Downgrades Schnitzer Steel (SCHN) to Neutral; Pre-Release Indicates Significantly Lower Q1 Earnings Expected

DA Davidson downgraded Schnitzer Steel (NASDAQ: SCHN) from Buy to Neutral, price target slashed from $67 to $49.

DA analyst says, "SCHN provided preliminary results for its first fiscal quarter, ended November 30th. The company expects earnings to be in a range of $0.18-$0.25 per share (there was no previous specific earnings guidance). Schnitzer indicated ferrous margins in its core recycling business would be ~50% below prior year levels (of $21 per ton). The company had previously expected ferrous margins to approximate last year’s levels. Auto Parts operating income is now expected to be ~30% below last year...We are reducing our first quarter estimate to $0.20 per share from $0.62 previously to reflect the company’s new guidance."

DA lowers FY12 EPS estimate from $4.70 to $3.80 and FY13 from $5.30 to $4.75.

For an analyst ratings summary and ratings history on Schnitzer Steel click here. For more ratings news on Schnitzer Steel click here.

Shares of Schnitzer Steel closed at $45.73 yesterday.

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