Rosenblatt Raises Price Target on U.S. Steel (X) to $35; Reiterates Buy
Rosenblatt reiterated a Buy rating on US Steel (NYSE: X), and raised the price target to $35.00 (from $25.00), following the company's 2Q earnings report.
Analyst Chris Olin commented, "U.S. Steel (X) reported a 2Q earnings loss of $0.36 per share (adjusted), which came in above Street expectations. More importantly, the management team said the portfolio was on track to generate full-year EBITDA of $850 million (based on current market conditions), well above the previous outlook of $400 million. The revised guidance implies a 2H16 EBITDA run-rate of $1.6 billion (annualized), which would represent the strongest earnings potential since early 2014. The rebound in domestic spot carbon sheet prices, improved European market conditions with a favorable USSE product mix shift, and realized gains associated with Carnegie Way are clearly flowing to the bottom-line. We raised our full-year EPS outlook to ($0.13), which assumes a 2H EPS potential of +$2.25-2.50 and now project the 2017 earnings potential at $3.19 per share (up from +$0.30). Accordingly, we maintain a near-term positive thesis on the shares with an increased 12-month price target of $35 (up from $25)."
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Shares of US Steel closed at $25.49 yesterday.