Expect a pullback in AK Steel, US Steel, Nomura says

The big rally in steel stocks like AK Steel (AKS -1%), US Steel (X -1.3%) and Steel Dynamics (STLD +1.4%) can be explained in part by better steel and company fundamentals, but they also reflect a dose of over-optimism, Nomura says in suggesting investors now on the sideline wait for a better entry point.

Following the strong sector run, the firm foresees equity price weakness into Q2 as sheet and scrap/iron ore values correct, which it would then view as a better entry point for the integrated steel names.

Nomura's bias on the group remains positive, and believes particularly AKS and X are becoming more broadly “investable.”

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Comments (1)
  • Blue Horshoe love Anacot Steel
    , contributor
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    this is exactly what everyone hates about analysts. nomura can say whatever they want about it being too early. this is a case about nomura being too late. they missed much of the runup all the while, asleep at the wheel, maintaining a $3 target on aks and $18 on X. instead of admitting they were wrong they say, "wait for a better entry point" and quietly DOUBLE their target on AKS and raise US Steel to 27 (a dollar under what it is now).


    What purpose does an analyst serve if they adjust their target AFTER the stock has already run up?
    16 Jan 2014, 05:07 PM Reply Like
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