U.S. Steel (X) Stock Up, JPMorgan: Can Gain 44%
U.S. Steel (X) stock is gaining on a 2016 second quarter beat, and JPMorgan said the stock can gain 44% by year’s end 2017.
Rachel Aldrich Follow Jul 28, 2016 11:49 AM EDT
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NEW YORK (TheStreet) -- Shares of U.S. Steel (X) are rising 2.24% to $26.06 in midday trade after analysts at JPMorgan released a bullish note saying the stock could gain as much as 44% by year's end 2017.
The firm has an "overweight" rating on the stock and a year-end 2017 price target of $37.
JPMorgan said the company's recent notes offering "greatly improved" its liquidity profile. U.S. Steel's domestic sheet supply cuts alongside the company's Carnegie Way improvements "can drive significant earnings leverage into 2017," the firm added.
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"In addition to strong, positive earnings momentum and the recent balance sheet improvements, the 30% short interest in the stock should also support outperformance," JPMorgan said.
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Also, U.S. Steel reported higher-than-expected 2016 second quarter earnings yesterday before the opening bell. The company reported a loss of 31 cents per share, compared with analysts' estimates of a 49 cent-loss.
Revenue for the period dropped 11% year-over year to $2.58 billion, lower than Wall Street's estimated $2.68 billion.
Separately, 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.
TheStreet Ratings rated this stock as a "sell" with a ratings score of D.
The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins.
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