What Analysts See in AK Steel under Trump’s Presidency




AK Steel (AKS) closed at $7.95 on March 14—0.8% higher than the previous day’s closing. So far, 2017 has been a dismal year for AK Steel investors with the stock losing 22.1% year-to-date. AK Steel has been among the worst performing steel company this year. However, the stock was among the best performing steel companies last year. President Trump’s election boosted market sentiments (MDY) (MID-INDEX). In this part, we’ll see how analysts rate AK Steel.

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Target price

According to consensus estimates compiled by Thomson Reuters, AK Steel has a mean one-year price target of $9.78—23% upside compared to its closing price on March 14, 2017. Of the 13 analysts surveyed by Thomson Reuters, only two recommended AK Steel stock as a “buy” or some equivalent, while one recommended a “strong sell” on the stock. The remaining 77% of the analysts recommended a “hold” on the stock.

Analysts’ action

Some analysts downgraded AK Steel after the company’s 4Q16 earnings release. On January 25, J.P. Morgan downgraded the stock to “neutral” from “overweight,” while cutting its one-year price target from $11 to $8.

BMO Capital Markets also cut AK Steel’s price target from $11 to $10 after its 4Q16 earnings release. Both brokerages, especially J.P. Morgan, have been bullish on steel stocks (MT) (NUE) for quite some time.

Although some brokerages turned bearish on AK Steel, Moody’s recently raised the company’s credit rating. It raised AK Steel’s CFR corporate family rating to B2—one notch above its previous rating.

In the next part, we’ll see how analysts rate U.S. Steel Corporation (X).


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