broker ratings

Citi 13/11/2009 3 Hold, High Risk $3.10 7.3%
Citi notes the projected 1H loss from the AGM was below market expectations, with falling steel prices and FX headwinds more than offseting improved volumes.

Sure admits Citi, demand is improving, just not as fast as the market seemed to be expecting.

The broker has cut FY10-11 earnings by 6% and 9% respectively, with the broker expecting that higher shipments will be offset by weaker pricing, currency headwinds and higher finance charges going forward.

The target price is trimmed to $3.10 (from $3.40) on the lower earnings and the Hold call is maintained.

JP Morgan 13/11/2009 1 Overweight $3.40 17.6%
Target $3.40 (was $3.60). Management reiterated guidance of a small 1H10 loss at the group's AGM and the broker sees this as somewhat disappointing given capacity utilisation has been strong.

To reflect the update the broker has lowered its full year numbers and this brings down its target price. Depite the changes the stock still looks cheap and so the broker's Overweight rating is retained.

UBS 13/11/2009 1 Buy $4.05 40.1%
Given the higher production, UBS had been expecting upgraded earnings guidance at the AGM, however, the broker was left disappointed.

The broker had already allowed for a stronger AUD, but lower domestic prices are below those expected.

Despite these near term challenges, UBS retains its Buy recommendation on the stock based on long term valuation.

Credit Suisse 13/11/2009 1 Outperform $3.73 29.1%
The broker notes AGM commentary from management confirmed the current trading environment, which implies earnings a little lower than previous expectations.

While there is little short-term earnings support the stock offers leverage to a recovering economy and so represents longer-term value at current levels in the broker's view. Given this it retains its Outperform rating with an unchanged $3.73 price target.

Deutsche Bank 13/11/2009 1 Buy $4.37 51.2%
While management was only guilty of maintaining the 1H guidance at the company's AGM, the market reacted negatively, with the broker thinking that expectations had simply gotten ahead of themselves on the recent evidence of reviving demand.

Deutsche seems to be on of those that got carried away, with the retained guidance seeing the broker cut FY10 EPS by almost 29%.

Otherwise, the broker maintains it Buy call, saying that Bluescope represents good value given its "conservative" mid-cycle valuation/target of $4.37, which it notes is 51% above the current share price.