NEW YORK (TheStreet) -- Shares of AK Steel (AKS) - Get Report were advancing in mid-morning trading on Wednesday as Bank of America/MerrillLynch raised its rating on the stock two notches to "buy" from "underperform."

The firm also upped its price target to $8 from $4 on shares of the West Chester, OH-based steel producer.

"We upgrade...to reflect assumed sustained recent cost performance and a modest met coal cost hike," BofA/Merrill Lynch wrote in an analyst note.

Yesterday, AK Steel reported better-than-expected earnings for the 2016 third quarter.

"Management on its Q3 call said it contracted met for 2017E in early Q3, for assumed limited price rise year-over-year. We raise earnings per share for 2017E to 90 cents from a prior 55 cents, and see its focus on premium products continuing to benefit results," the firm added.

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Additionally, BofA/Merrill Lynch said its channel checks indicate U.S. scrap steel prices are posited to rise $30 to $40 per ton in November. That is driven by better global demand and higher metallurgical coal prices.

Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.

This is driven by several weaknesses, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.

Among the areas that are negative, one of the most important has been poor profit margins.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: AKS

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