Story updated at 10 a.m. to reflect market activity.
NEW YORK (TheStreet) -- Steel Dynamics STLD was upgraded to "buy" from "hold" by Keyblanc Monday.
Steel Dynamics gained 2.1% to $21.36 in morning trading.
The analyst first set a $28 price target for the company. Steel Dynamics' recent acquisition of Sverstal's Columbus facility should boost growth according to Keyblanc analyst Tyler Kenyon.
Kenyon wrote, "Despite the recent rally in the shares following the Company's announced acquisition of Severstal's Columbus, Miss. facility (we see deal closing in mid-September), we believe investors are under-appreciating: 1) likelihood of upside surprises from the acquisition (we see 2015 EPS accretion nearer $0.45/share and longer-term accretion nearer $0.60 vs. the Company's guidance of roughly $0.30-$0.35/share); 2) improving sheet metal spreads via positive industry trends; 3) operational progress at Mesabi Nugget; and 4) sizable pro forma free cash flow on our 2015 view of over $600 million (12% free cash flow yield). Our 2014 view is raised from $1.19 to $1.20, while our 2015 EPS view becomes $2.25 (from $1.60) and compares to the Street's $1.82."
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Separaetly, TheStreet Ratings team rates STEEL DYNAMICS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate STEEL DYNAMICS INC (STLD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."