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POSCO (PKX) Upgraded to Strong Buy on Solid Growth Prospects
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On Jul 6, Zacks Investment Research upgraded POSCO (PKX - Free Report) to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
In the last one year, POSCO’s American Depository Receipts (ADR) have yielded a return of 49.88%, outperforming the gain of 37.39% recorded by the Zacks categorized Steel Producers industry.
Why the Upgrade?
Market sentiments have been favoring POSCO for quite some time now. Notably, the company’s shares have rallied 10.97% since the release of impressive first-quarter 2017 results on Apr 18. Year-over-year growth of 189.1% in net income came on the back of revenue growth and the company’s cost reduction initiatives.
In the years ahead, POSCO aims to grow by strengthening its competitiveness in steel production, focusing on new businesses opportunities and improving its financial as well as managerial structure. Its core operations consist of steel and four other major growth businesses, including energy, materials, infrastructure and trading. Also, the company has taken measures to dispose some of its profitable but non-core assets to improve its core competitiveness. As disclosed in 2016 results, it anticipates continuing with its restructuring efforts, expecting to sell roughly five assets and consolidating 18 subsidiaries in 2017. Benefits from its restructuring initiatives are likely to total KRW 6.9 trillion.
In 2017, global steel demand worldwide is anticipated to grow 1% year over year on the back of demand expansion in China, India, Southeast Asia and other emerging nations. To leverage benefits from rising demand, the company aims to improve its businesses and services through its capital investment plan of KRW 3.5 trillion. Also, on a consolidated basis, revenues are projected to be approximately KRW 54.8 trillion, while finished product sales are estimated to be roughly 34.6 million tons. Crude steel production is projected to be nearly 37 million tons.
Investors seem to be optimistic about POSCO’s future prospects, as evident from positive revisions in earnings estimates for the stock. Over the last 60 days, the Zacks Consensus Estimate for the company inched up 0.81% to $6.24 per ADR for 2017 and 0.3% to $6.65 for 2018. These estimates represent year-over-year growth of 74.79% for 2017 and 6.57% for 2018.
Gerdau’s earnings estimates for 2017 were revised upward over the last 60 days.
Ternium S.A.’s earnings estimates for 2017 and 2018 improved over the past 60 days. Also, the company delivered an average positive earnings surprise of 19.98%, over the last four quarters.
Universal Stainless & Alloy Products’ earnings estimates for 2017 and 2018 improved over the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
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POSCO (PKX) Upgraded to Strong Buy on Solid Growth Prospects
On Jul 6, Zacks Investment Research upgraded POSCO (PKX - Free Report) to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
In the last one year, POSCO’s American Depository Receipts (ADR) have yielded a return of 49.88%, outperforming the gain of 37.39% recorded by the Zacks categorized Steel Producers industry.
Why the Upgrade?
Market sentiments have been favoring POSCO for quite some time now. Notably, the company’s shares have rallied 10.97% since the release of impressive first-quarter 2017 results on Apr 18. Year-over-year growth of 189.1% in net income came on the back of revenue growth and the company’s cost reduction initiatives.
In the years ahead, POSCO aims to grow by strengthening its competitiveness in steel production, focusing on new businesses opportunities and improving its financial as well as managerial structure. Its core operations consist of steel and four other major growth businesses, including energy, materials, infrastructure and trading. Also, the company has taken measures to dispose some of its profitable but non-core assets to improve its core competitiveness. As disclosed in 2016 results, it anticipates continuing with its restructuring efforts, expecting to sell roughly five assets and consolidating 18 subsidiaries in 2017. Benefits from its restructuring initiatives are likely to total KRW 6.9 trillion.
In 2017, global steel demand worldwide is anticipated to grow 1% year over year on the back of demand expansion in China, India, Southeast Asia and other emerging nations. To leverage benefits from rising demand, the company aims to improve its businesses and services through its capital investment plan of KRW 3.5 trillion. Also, on a consolidated basis, revenues are projected to be approximately KRW 54.8 trillion, while finished product sales are estimated to be roughly 34.6 million tons. Crude steel production is projected to be nearly 37 million tons.
Investors seem to be optimistic about POSCO’s future prospects, as evident from positive revisions in earnings estimates for the stock. Over the last 60 days, the Zacks Consensus Estimate for the company inched up 0.81% to $6.24 per ADR for 2017 and 0.3% to $6.65 for 2018. These estimates represent year-over-year growth of 74.79% for 2017 and 6.57% for 2018.
POSCO Price and Consensus
POSCO Price and Consensus | POSCO Quote
Other Stocks to Consider
POSCO has a market capitalization of $20.57 billion. Other stocks worth considering in the steel producers industry include Gerdau S.A. (GGB - Free Report) , Ternium S.A. (TX - Free Report) and Universal Stainless & Alloy Products, Inc. (USAP - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Gerdau’s earnings estimates for 2017 were revised upward over the last 60 days.
Ternium S.A.’s earnings estimates for 2017 and 2018 improved over the past 60 days. Also, the company delivered an average positive earnings surprise of 19.98%, over the last four quarters.
Universal Stainless & Alloy Products’ earnings estimates for 2017 and 2018 improved over the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>