U.S. Steel, AK Steel cut to Neutral from Buy at Nomura
- U.S. Steel (NYSE:X) -2% and AK Steel (NYSE:AKS) -3.7% premarket after Nomura downgrades each stock to Neutral from Buy, with respective price targets of $21 (lowered from $37) and $4 (cut from $10).
- The firm sees two major structural changes underway that should significantly alter the global steel landscape in the coming years: dollar strength and cost curve deflation driven by lower raw material prices and freight rates.
- Flat-rolled and long product import pressure have been significant headwinds for the industry over the past year, and Nomura expects further dollar appreciation into 2016 will keep import pressure high.
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