The firm reiterated its "buy" rating and $9 price target on the sixth-largest U.S. steelmaker based on improved global electrical steel demand, declining iron ore costs, and better free cash flow as estimated 2015 project spending winds down.
"Last week we hosted CFO Roger Newport in investor meetings with New York, where he was upbeat that the recent $20/ton price hike was sticking and more could follow," the firm wrote in a research note.
"Contract prices for AK have yet to reflect the YTD drop in spot prices, and when volumes improve in H2 as we expect, prices may fall with more commodity grade tons as costs fall on greater utilization," BofA/Merrill continued. "He also spoke confidently about trade cases being filed (against sheet imports), and said they could be filed independent of separate legislation aiming to lessen the proof of injury standard in the process."
Separately, TheStreet Ratings team rates AK STEEL HOLDING CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AK STEEL HOLDING CORP (AKS) a SELL. This is driven by a number of negative factors, which we believe 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 we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."