Axiom Remains Negative On United States Steel Shares, $21 PT

In a research report issued today, Axiom analyst Gordon Johnson reiterated a Sell rating on United States Steel (NYSE:X) with a $21 price target.  

Johnson commented: “While we believe many pundits see $1/shr in quarterly earnings for X as sustainable (or $4/yr in annual earnings × a 10x P/E multiple, justifying today’s ~$40/shr stock price), should HRC prices fall back below $620/s. ton, we believe X would once again be at/below break-even on the bottom line; more specifically, with: (a.) inventories spiking (MSCI + steel mill inventories), (b.) scrap prices plummeting recently (increasing the competitiveness of the mini mills), (c.) imports into the U.S. rising to near all-time record levels, exacerbated by (d.) the increasingly bleak prospect of a U.S. trade case against foreign HRC producers (driving HRC imports higher), as well as our discussions w/ industry experts during our attendance at the 9/18 American Steel Distributors (ASD) meeting, we see HRC spot prices falling back to ~$620/s. ton by year-end ‘14; resultantly, we see X as among the better shorts in our metals & mining universe on the aforementioned trends.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gordon Johnson has a total average return of 11.5% and a 62.1% success rate. Johnson has a -60.1% average return when recommending X, and is ranked #326 out of 3310 analysts.

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