- U.S. Steel (NYSE:X) +2.6% premarket after Citigroup (NYSE:C) upgrades shares to Buy from Neutral with a $46 price target, lifted from $43, ahead of a "very bullish" catalyst in steel prices.
- U.S. flat rolled prices are peaking and expected to gap lower, although they likely will make "higher lows" similar to met coal and iron ore equities in 2017, Citi analyst Zlexander Hacking says.
- Noting that shares are down ~25% in recent weeks with the price of iron ore, U.S. Steel now has "good value at 10% FCF yield in 2018-19 and considerably higher in 2020-plus, post-asset revitalization," Hacking writes.
- The firm also raises its steel price forecasts after recent tariff announcements and downgrades Commercial Metals (NYSE:CMC) to Neutral from Buy with a $22 price target, cut from $29, as several rebar projects announced in recent months will offset the benefit of lower imports.
- Now read: Steel And Aluminum On The Negotiating Table
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