On Citi’s assessment, BlueScope Steel released a better-than-expected interim performance, but also provided soft guidance for H2. Coronavirus uncertainty rules. The analysts believe market sentiment will likely remain weak for the time being.
It is Citi’s view that share price weakness is creating an attractive entry-point for investors looking beyond the short term. Buy rating retained, with a price target of $15 (unchanged).
The broker notes the company has -prudently- shrunk its share buyback. On the back of the subdued guidance, EBIT forecasts have been reduced by -8%, -5% and -2% in FY20-22.
Target price is $15.00.Current Price is $12.69. Difference: $2.31 – (brackets indicate current price is over target). If BSL meets the Citi target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).