The firm has an $18 price target on shares of the Pittsburgh-based steel producer.
KeyBanc has become "incrementally more cautious" on U.S. carbon sheet market prospects amid slowing demand and fourth-quarter supply risks such as stronger imports and another potential hot rolled coil (HRC) steel producer.
"A weakened prospective supply-demand balance should place further pressure on already sliding U.S. carbon sheet prices and supports our view of a more competitive backdrop in '17 (with added risks)," the firm wrote in a note.
Next year will likely represent peak U.S. carbon sheet cyclical demand, and equities with high exposure to U.S. carbon sheet should see forward multiple compression, KeyBanc added.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
U.S. Steel's weaknesses include its generally high debt management risk, disappointing return on equity and poor profit margins.
You can view the full analysis from the report here: X
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 article's author.