UPDATE: Wolfe Research Starts US Steel (X) at Peerperform

Wolfe Research analyst Timna Tanners initiates coverage on US Steel (NYSE: X) with a Peerperform rating and a price target of $27.00.

The analyst comments "We launch on U.S. Steel (X) with a Peer Perform rating and $27/shr price target in the context of a cautious view on steel prices and looming regional oversupply. We expect a flood of new North America sheet from 2020-24E, a virtual sheet storm adding ~23% new capacity to the region. Offsetting expected falling earnings power are ~1/3 of tons on fixed price contracts that can smooth average realized selling prices. Greater industry consolidation should boost contract pricing power, with minimill incursion into the most challenging auto applications potentially 5+ years away. Fixed contract prices are a smaller proportion of its mix than historically, however, given the 2021 addition of mini-mill capacity via BRS. We forecast benchmark hot rolled coil (HRC) at $725/st in 2023E from a recent ~$1800/t."

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

Shares of US Steel closed at $25.73 yesterday.

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