Tuesday, May 25, 2010

Citigroup (NYSE:C) Upgrades AK Steel (NYSE:AKS) to "Buy"

Saying he believes the correction of AK Steel (NYSE:AKS) is overdone, Citigroup (NYSE:C) analyst Brian Yu upgraded the company from "Hold" to "Buy."

Yu likes the stainless steel segment of the company, while recognizing the upward pressures on iron ore prices and how they will affect AK Steel and the rest of the industry.

Two forces on working on iron ore prices, one in the short-term, which has already happened, with prices surging, and one for the long-term, which is related to the uncertainties of the potential lowering of demand from China could cause prices to tumble from where they are today.

The near-term term concerns are how the rising prices will affect margins for AK Steel from higher input costs.

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