Brokers upgrade Bluescope on plan to restart furnace
July 18, 2009 Article from: Dow Jones Newswires BLUESCOPE Steel's decision to restart its second Australian blast furnace and its less subdued market commentary has persuaded four brokers to lift their targets on the stock, and most now expect a return to profitability this fiscal year.
Australia's largest steelmaker said on Thursday that it would restart No5 blast furnace at its Port Kembla steelworks, south of Sydney, next month, earlier than market expectations. The furnace will now come online in September.
Bluescope also cut its full-year earnings expectations to a "small loss", compared with market consensus of a net profit, because of continuing challenging market conditions, increased restructuring and redundancy costs, and a stronger Australian dollar.
Following the news, Merrill Lynch lifted its price objective on Bluescope to $3.20 from $2.95, Deutsche Bank raised its target to $3.75 from $3.09, Citi to $3 from $2.50 and JPMorgan to $3.60 from $3.15.
Bluescope shares rose 3c, or 1per cent, to $2.90. The stock is up 3.2 per cent this calendar year, compared with the broader market's 7.9 per cent gain.
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