One Steel (OST) Update

Submitted by Share Trading on 11 April, 2008 - 11:03

One Steel (OST) has a Neutral stock recommendation and a $7.00 price target per share from Australian stock analyst Macquarie Research Equities.

One Steel (OST): A Short Term Steel

One Steel (OST) - Neutral
Current Price: $6.48
Target Price: $7.00 (~8% Upside)
P/E: 16.9 X
Div Yield: 3.2% (100% Franked)

One Steel (OST) Technical Analysis

OST is looking good for a short term trade in our view after a strong performance from the steel names in the US overnight, with Nucor adding 3.24%.

OST has been trading in a well established upward channel of late, and its move to the lower end of this trading channel could create a buying opportunity. Also worth noting is the key support / resistance level at $6.50.

Macquarie Research Equities One Steel (OST) Fundamental View:

1. OST stands to benefit from what MRE believes will be a strong outcome in contracted iron ore negotiations. A resulting jump of 65% or more leaves room for a potential earning upgrade for OST. MRE believes there is potential for volume and pricing upside for OST in iron ore.
2. OST is the only stock in the steel sector that receives a net benefit from an ongoing high AUD as their cost base is largely in USD.
3. MRE forecasts 18.5x FY08 EPS growth, jumping to 25.2x in FY09.
4. Catalyst: Upcoming iron ore contract negotiations.