AK Steel +17% after strong guidance, but Wells Fargo says stay away


AK Steel (AKS +17.1%) surges after saying it expects to report a surprise Q4 profit, and other steel names are rising in response: X +4.1%, NUE +1.7%, STLD +1.4%, MT +0.8%.

Barclays raises its AKS target price to $8 from $5, citing revised guidance as well as improvements in underlying steel fundamentals which matter more for AKS than other upstream steel producers as it significantly reduces the liquidity concerns (Briefing.com).

Wells Fargo, however, tells investors not to chase AKS shares higher; the firm is concerned that steel companies will be caught off guard if auto demand moderates, which it views as a possibility since dealer inventories are at multi-year highs.

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Comments (1)
  • jetson100
    , contributor
    Comments (16) | Send Message
     
    Even if auto sales moderate, ak steel produces steel for new home construction and the numbers look good for builders.
    20 Dec 2013, 12:21 AM Reply Like
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