Both AK Steel and U.S. Steel are surrounded by pessimism
J.P. Morgan Securities weighed in on the steel industry today, and the results weren't pretty. AK Steel Holding Corporation (NYSE:AKS) was downgraded to "underweight" from "overweight," while United States Steel Corporation (NYSE:X) saw its rating cut to "neutral" from "overweight," and price target trimmed to $14 from $26. The brokerage firm cited the fluctuating price of steel as a headwind, as well as the ongoing strike at General Motors with the United Auto Workers (UAW) union.
At last check, AK Steel stock is down 2.5% to trade at $2.36, heading to its fifth straight loss and just barely clinging to its year-to-date breakeven level. AKS remains 42% off its May 31 three-year low of $1.66, but has seen recent rallies rejected by the $3 area.
Today's downgrade is nothing new though. In the analyst community, eight out of nine in coverage rate the equity a "hold" or "sell," and the consensus 12-month price target of $2.02 is a 16.9% premium to Friday's closing perch of $2.43.
Looking at U.S. Steel, the stock is down 0.7% to trade at $10.73, also on track for its fifth straight session in the red. Year-over-year, X has given back 63%.
Similar to its sector peer, most analysts are staying away from X. There are 12 brokerages covering the security, and 10 rate it a "hold" or worse. Meanwhile, its average 12-month price target of $11.67 sits 8% above Friday's closing perch of $10.81.