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 UNITED STATES STEEL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED STATES STEEL CORP (X) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow."