Deutsche Bank 19/08/2009 1 Buy $3.69 21.4%Bluescope's result was...

Deutsche Bank 19/08/2009 1 Buy $3.69 21.4%
Bluescope's result was in line and a positive outlook came as no surprise in what appears to be an improving environment. The broker suggests BSL has proven its ability to improve inventory in the downturn and expects the next catalyst will be an announced increase in capacity utilisation.

Target falls from $3.75 to $3.69.

Aspect Huntley 18/08/2009 3 Upgrade to Hold from Reduce - -
Update database.

Credit Suisse 18/08/2009 1 Outperform $3.73 22.3%
While the group's loss for FY09 was bigger than expected the broker sees little of importance in the actual number and instead suggests the reduced balance sheet risk and signs of a recovery in volumes are more significant.

On the broker's numbers the stock has a medium-term valuation of $4.00-$5.00 but lacks near-term earnings to support this and so its post result price target increases to only $3.73 from $3.00.

Outperform retained.

RBS Australia 18/08/2009 1 Buy $3.55 18.3%
The group's loss for the year was a little larger than the broker had forecast but it saw cost savings as a positive in the period.

While any recovery should be volatile the broker sees value at current levels and so retains its Buy rating post the result.

Macquarie 18/08/2009 1 Outperform $4.00 27.5%
The broker upgraded Bluescope to Outperform last week following the analysts' forecast earnings increases. They suggested the outlook for steel was on the improve and with the greatest operating leverage in the market, BSL was the broker's preferred sector exposure.

That attitude has not changed, despite BSL reporting a bigger loss than the analysts had expected. Indeed, signs of improving margins have led to another slight increase in forecast earnings.

Target and rating maintained.

Citi 18/08/2009 3 Hold, High Risk $3.40 14.7%
Citi has slashed Bluescope Steel's FY10 earnings estimate 21% to 8.7%, to account for new guidance, stronger iron ore price and tighter divisional spreads.

City says Bluescope Steel's result was in line with expectations and maintains its Hold rating and target price.

BA-Merrill Lynch 18/08/2009 1 Buy, High Risk $3.40 14.7%
It was an ugly, if expected, full year result, with net profit of $56m down from $816m last year.

However, the broker is expecting improved volumes and higher capacity utilisation from here on out and says this will lead to a "strong" earnings recovery in 2H10.

With the stock highly leveraged to global steel prices and volumes, and these being on the improve, the broker maintains its Buy call and lifts it target price to $3.40 (from $3.20).

JP Morgan 18/08/2009 1 Overweight $3.60 19.4%
The company recorded a bigger full year loss than the broker had expected but it suggests FY09 was far from a normal year and so it puts little weight on the result.

While the stock looks expensive on near-term earnings the broker argues it is cheap on long-term valuation measures and so it retains its Overweight rating.

UBS 18/08/2009 1 Buy $3.35 13.4%
Although the profit result was in line with UBS forecasts, the analysts point out that this was achieved by a tax gain, saying pre-tax numbers came in well short.

Although UBS has made minor earnings revisions, the analysts feel the sustainability of domestic demand is key for BSL. The broker holds the view that this sustainability should signal whether or not production at Port Kembla can be increased from the current 75%.

Despite the negatives, management commentary leaves UBS feeling comfortable with a more long term Buy on the stock, with the analysts concluding that these issues were in the past.