AK Steel Holding and United States Steel Advance on Positive Investment Ratings

AK Steel Holding and United States Steel both were rewarded by investors for their stock market performance and increased financial management. Both companies diversify in the manufacture and production of steel products. The announcement by the Federal Reserve that it would increase interest rates did not have any negative impact on either of the companies, indicating that the Fed increase will have little, if any, effect on the manufacturing industry. AK Steel Holding was a beneficiary of its parent company’s positive news.

RDI Initiates Coverage:

AK Steel Holding Corporation          

United States Steel Corporation     

AK Steel Holding found itself settling to close at $8.31 a share after hitting an early morning high of $8.53. It closed up 6 cents. The news on its rating by investment rating services is a mixed bag this year so far, with J P Morgan downgrading the stock to a “neutral” level from “overweight” rating, Credit Suisse downgrading it to “neutral” and Citi downgrading it to “sell”, during the month of January. In contrast, a number of investment firms like Jafferies Group reiterating “buy” rating on the stock since January and Deutsche Bank AG is maintaining “Hold” ratings since early December last year. If we look at the investors activities of the last quarter, institutions still holding over 82 percent of the company’s share with ratio of total number of increased positions to the total number of decreased positions in the quarter standing nearly 4 to 1. While latest positive news is coming Moody’s Investors Service for upgrading the Corporate Family Rating (CFR) of the company from B3 to B2 on March 9th of this year. Moody also commented that the AK Steel’s outlook was “stable.” Helped by cost cutting measures, AK Steel has posted better result I January for the fourth quarter of 2016 with net loss of $0.22 a share and adjusted earnings of 0.25 a share on revenue of $1.42 billion, which is better than the consensus estimate of earnings $0.06. The company will release result for the first quarter on April 25th.

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United States Steel (U.S. Steel) closed flat at $37.29 a share at the close on Friday. It was announced that Cowen and Company had upgraded its recommendation on U. S. Steel to “outperform” from “market perform” in February with the expectations of higher positive earnings surprise this year, whereas post its fourth quarter result, J P Morgan raised price target from $37 to $39 and Bank of America raised its rating from “neutral” to “buy”. However, a number of technical indicators show that the company’s stock is either overbought or overvalued, recommending that caution be used as the stock continues its climb. On November 2nd of last year, its stock price was at $17.82 and it had a steady rise since then, reaching a 52 week high of $41.57 on February 21st of this year. U.S. Steel has reported a net loss of $0.61 a share and adjusted earnings of $0.27 a share on revenue of $2.65 billion for the fourth quarter of 2016, crushing estimated range of $0.01 to $0.04 a share of adjusted earnings by consensus, from different surveys.

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Our Actionable Research on AK Steel Holding Corporation (NYSE:AKS) and United States Steel Corporation (NYSE:X) can be downloaded free of charge at Research Driven Investing.

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