Schnitzer Steel’s Target, Estimates Cut at Auriga; Shares Plunge (SCHN)

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Steel producer Schnitzer Steel Industries, Inc. ( SCHN ) on Friday caught some negative commentary from analysts at Auriga USA.

The firm maintained its "Hold" rating on SCHN but slashed its price target from $44 to $36. That new target suggests a small upside to the stock's Thursday closing price of $32.34.

An Auriga analyst commented, "Schnitzer Steel ( SCHN ) announced its market outlook for the fiscal 3Q12 quarter (May), which we believe translates to a sequential earnings decline. Consequently, we are drastically reducing our fiscal 3Q12 EPS estimate, which is slightly below consensus, from $0.70 to $0.25. We are also reducing our full-year fiscal 2012 and 2013 EPS estimates from $2.25 and $4.40 to $1.30 and $3.75, respectively. The revisions are being driven by ongoing top-line headwinds from the current economic environment, which is being compounded by increases in costs for raw materials."

Schnitzer Steel shares plummeted $3.53, or -11%, in morning trading Friday.

The Bottom Line
Shares of Schnitzer Steel ( SCHN ) have a 2.32% dividend yield, based on last night's closing stock price of $32.34. The stock has technical support in the $25 price area. If the shares can firm up, we see overhead resistance around the $34-$36 price levels.

Schnitzer Steel Industries, Inc. ( SCHN ) is not recommended at this time, holding a DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: SCHN

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