Nomura Securities Reiterates a 'Neutral' on AK Steel (AKS); Q1 Review

Nomura Securities reiterates a 'Neutral' on AK Steel (NYSE: AKS) price target of $8.00.

Analyst, Curt Woodworth, said, "AK Steel reported a 1Q EPS loss of $0.11 (in line with our estimate at -$0.11 / Street at -$0.11), driven by higher overall ASP and stainless / electrical steel volume, offset by lower overall shipments and cost inflation. AK expects a profitable 2Q, and we now forecast 2Q12 EPS of $0.20, down from our previous $0.27 (Street $0.18) to account for negative ASP impact. We forecast a 2% decrease in the electrical steel price and expect electrical volumes to stay flat in 2Q amid slower growth in Asia. We find AK’s valuation stretched after adjusting for high legacy liabilities. AK’s pension-adjusted EV/EBITDA multiples are 10.2x in 2012E and 7.6x in 2013E, compared to the pre-adjusted 4.7x 2012E and 3.6x 2013E multiple and X’s pension-adjusted EV/EBITDA at 6.0x 2012E and 4.8x 2013E."

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

Shares of AK Steel closed at $7.20 yesterday.

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