0203 GMT -- Goldman Sachs is such a big believer in BlueScope Steel's (BSL.AU) plan to overhaul its business to counter the drop in steel prices and spreads that it has added the Australian company to its conviction buy list. BlueScope says it will either find more than A$200 million in savings by FY17 or close its Australian steel-making operations. Goldman Sachs thinks the former is most likely. "Despite ongoing deterioration in domestic demand and steel spreads, we believe this delivers a clear path to earnings improvement over the medium term," analyst Owen Birrell says. Goldman Sachs expects the steel maker's net profit to rise at a compound annual rate of 28% over three years. The broker lifts its target price by 30% to A$5.85/share. BSL last traded at A$4.51.([email protected]; @dwinningWSJ)
BSL Price at posting:
$4.50 Sentiment: Buy Disclosure: Held
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