STLD - U.S. Steel cut to Sell equivalent at Morgan Stanley as steel price seen peaking

U.S. Steel (X -1.5%) tilts lower after Morgan Stanley double downgrades shares to Underweight from Overweight with a $17 price target, slashed from $35, predicting steel prices will peak during the current quarter. Tight supplies have sent the price for hot-rolled steel coil tripling to $1,900/ton over the past year, but that's off a bit from $1,950 in September, enough to worry analysts and investors, reports Al Root at Barron's. U.S. Steel shares are 30% higher YTD but are trading for ~3x expected FY 2022 EPS, compared to 20x for the broader S&P 500, a sign that investors do not expect high levels of steel pricing or profitability to last into the future, according to Root. Morgan Stanley also downgrades Steel Dynamics (STLD +0.9%), Ternium (TX -0.9%) and Gerdau (GGB -0.7%) to Equal Weight from Overweight.

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U.S. Steel cut to Sell equivalent at Morgan Stanley as steel price seen peaking