Citi’s US steel analysts point to a potential multi-year bull cycle in long steel with demand to benefit from infrastructure spending. With a sharp reduction in historic steel spreads expected in FY23-24, the broker sees a strong valuation case for BlueScope Steel.
Buy retained. But Citi has lowered its target PE multiple to 17x from 20x, which leads to a target price decrease to $25.50 from $27.50.
Target price is $25.50.Current Price is $21.31. Difference: $4.19 – (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).