Steel Dynamics Down On Removal From Preferred List

NEW YORK (AP) — Shares of Steel Dynamics Inc. fell Monday after a Goldman Sachs analyst removed the shares of the steel producer from his firm's "Conviction Buy List" on concerns that selling prices could decline.

Goldman Sachs analyst Sal Tharani, who also left Steel Dynamics stock at a "Buy" rating, said steel equities generally do not respond well to falling prices.

"We believe that this scenario could repeat itself this time around," he wrote in a client note, calling his change a "tactical" move.

Even though the broader economy is strengthening, the period from late November to early January typically finds steel demand weakening.

"Steel stocks have had a nice run recently as demand indicators have improved and prices have risen considerably. However, with just 1 percent average upside to our new target prices, we do not believe an 'Attractive' coverage view is warranted."

His new target price of $20, down from $22, still implies the stock will rally 21 percent over the next year.

In midday trading, shares of Steel Dynamics fell 54 cents, or 3.3 percent, to $15.99.