Standpoint Says U.S. Steel is Now a “Buy”; Looking like a Value Play (X)

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Steel producer United States Steel Corporation ( X ) on Wednesday caught some bullish commentary from analysts at Standpoint Research.

The firm initiated coverage on X with a "Buy" rating and $34 price target, suggesting a 57% upside to the stock's Tuesday closing price of $21.61.

A Standpoint analyst commented, "This is a volatile and risky name with significant remaining risk and uncertainty. That being said, this name appears to be washed out at 90% off the all-time high…below book value…

Continuing, "X is dealing with declining steel prices...heavy pension liabilities and debt...European recession...funding gap...and most concerning...using a forward looking aggressive figure of 7.75% in its 10-K it expects as an annual return on $8 bln in pension assets...These issues and concerns can be offset in an economic recovery coupled with increasing demand and pricing that the market may be forecasting with the S&P at a multi-year high."

U.S. Steel shares rose 28 cents, or +1.3%, in premarket trading Wednesday.

The Bottom Line
Shares of U.S. Steel ( X ) have a .93% dividend yield, based on last night's closing stock price of $21.61. The stock has technical support in the $18-$20 price area. If the shares can firm up, we see overhead resistance around the $24 price level.

United States Steel Corporation ( X ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.9 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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