Recent News Impact - not much! After a negative revision to its fourth-quarter 2021 production guidance and a lower-than-expected production level in 1Q22, Scotia Capital analyst Michael Doumet cut his Stelco Holdings Inc. (
) target to $54 from $55, below the $55.75 average, with a “sector perform” rating.
“Big picture, we view the impact as temporary and relatively mild (we had already assumed a larger discount to ASPs versus CRU spot in 4Q21 and 1Q22 due to softening prices/demand),” he said. “On our lowered estimates, we estimate Stelco will still generate more than 40 per cent of its market cap in FCF through 2022, leaving ample opportunity for accretive capital deployment. We estimate the net impact of the outages to our FCFPS estimate will be 70 cents per share.”