BSL - Citi rates the stock as Hold, High Risk
BY BROKER NEWS - 09/02/2010
Get More Commentary, Dicussion & Market Information On -
• BSL - BLUESCOPE STEEL LIMITED
Based on the broker's recent upgrade to iron ore and coking coal prices, it has lifted its FY11-12 steel price assumptions by 4-5% to reflect the increased cost base.
However, given that the price increases are driven by rising costs, as opposed to real demand strength, the broker's steel spreads and earnings remain broadly unchanged.
In the case of BlueScope, FY10 earnings are raised by 7% to reflect the near-term gain from higher steel prices, while FY11-12 remain broadly unchanged. The price target stays put at $3.10, while the Hold call is maintained, as Citi is still cautious on steel shares. Sector: Materials.
Target price is $3.10.Current Price is $2.60. Difference: $0.50 - (brackets indicate current price is over target). If BSL meets the Citi target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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