Investors are encouraged to sell their stakes in United States Steel Corporation (NYSE: X), according to analysts at Axiom. The firm's Gordon Johnson maintains a Sell rating on US Steel's stock and expects the company to revise its guidance to the downside in
conjunction with Tuesday's earnings report.
U.S. Steel is expected to slash its 2017 EBITDA guidance by around 25 percent, according to Johnson's proprietary EBITDA
guidance tracker analysis. U.S. Steel previously guided its 2017 EBITDA to be $1.1 billion in 2017, but now a revision to $828
million is likely.
The analysis takes into account the change in hot-rolled
coil steel spot prices as of U.S. Steel's current and prior quarter earnings and the change in the company's EBITDA guidance as
of the current and prior quarter earnings among other factors.
"While, admittedly, this approach looks at just one facet of X's business, given, in general, Tubular- and European steel mkt
trends tend to move in tandem w/ the US mkt, we find our approach useful," the analyst wrote (see his track record here).
Also, the steel market likely experienced headwinds in the auto sector as evidence by General Motors Company (NYSE:
GM)'s third-quarter
loss of $3 billion, which marks its first loss since fourth-quarter 2019.
Finally, the financial model approach when using a 90-percent confidence interval over five quarters dating back to
second-quarter 2016, has predicted the company's EBITDA within 82 percent of the guided number, Johnson said.
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Earnings Scheduled
For October 31, 2017
Latest Ratings for X
| Date |
Firm |
Action |
From |
To |
| Oct 2017 |
Bank of America |
Maintains |
|
Buy |
| Sep 2017 |
Cowen & Co. |
Downgrades |
Market Perform |
Underperform |
| Sep 2017 |
Citigroup |
Maintains |
|
Sell |
View More Analyst Ratings for
X
View the Latest Analyst Ratings
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