ratings STLC An overall disappointing earnings report has analysts lowering their price targets for shares of Stelco Holdings Inc (STLC-T)
BMO cut its target price to C$45 from C$53; National Bank of Canada cut its target to C$48 from C$53; RBC reduced its target price to C$51 from C$53; and Scotiabank trimmed its target to C$48 from C$54.
Profits were a little lower at Stelco, commented Scotiabank analyst Michael Doumet, but they were “still plenty high.”
Stelco reported fourth quarter 2021 sales, adjusted EBITDA, and adjusted EPS of $1.186-billion, $673-million, and $6.79, respectively. That compared with consensus of $1.254-billion, $695-million, and $6.67. Steel shipments were in-line with what was pre-released by the company on Jan. 6.
“In the context of the steel price decline (and reduced shipments), we view the 4Q21 results as a modest positive and the moderated 1Q22 earnings outlook as largely in-line with expectations,” Mr. Doumet said in a note. “In 2021, inventory restocking and surging demand drove significant upside in HRC prices as supply gradually caught up. Supply has now caught up; as prices slide, inventory destocking is, naturally, putting incremental downward pressure on demand and pricing.”
He expects the company will continue to purchase its own shares going forward.