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Why AK Steel Isn’t Popular among Analysts

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AK Steel

AK Steel (AKS) has lost 17.0% year-to-date. AK Steel is the worst-performing steel stock among the steel companies that we’re covering in this series. In this part, we’ll look at AK Steel’s ratings and the consensus target price to gauge how analysts view the stock.

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Analysts’ rating

AK Steel doesn’t have any “strong buy” ratings. Five analysts rated the stock as a “buy,” seven analysts rated it as a “hold,” and three analysts rated it as a “sell.” The stock carries a mean consensus target price of $5.57, which represents an 18.5% upside over its closing price on June 8. AK Steel carried a consensus target price of $6.88 before its earnings were released for the fourth quarter of 2017. Several analysts lowered the stock’s target price after its earnings were released for the fourth quarter of 2017.

Downgrades

Analysts’ action after AK Steel’s first-quarter earnings release was no different and several leading brokerages downgraded the stock. On May 30, Goldman Sachs downgraded AK Steel from a “neutral” to “sell.”

AK Steel posted better-than-expected earnings in the first quarter. U.S. Steel Corporation (X), Nucor (NUE), and Steel Dynamics (STLD) also managed to beat the consensus earnings estimates in the first quarter. Read Steel Companies’ 1Q18 Reports Card: Gains and Losses for a comparative analysis of steel companies’ first-quarter performances.

On the macro front, US steel prices (XME) are hovering near multiyear highs after President Trump’s Section 232 tariffs. With a supportive macro environment, why is AK Steel stock sagging? Next, we’ll discuss AK Steel stock in more detail.

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