Boston, MA, 02/25/2014 (usastockreport) – United States Steel Corporation (NYSE:X) has been subjected to a rating downgrade by the analyst at KeyBanc to ‘Hold’ from ‘Buy’. Other steel producers involve Commercial Metals and Steel Dynamics who have been assigned the same rating. The analyst covering U.S. steel noted that the company has been facing more-than-expected flat rolled pricing headwinds and negative developments in its tubular segment resulting in pressure over profit and valuations. According to them, every $5 per ton change in flat rolled pricing is equivalent to affecting $70-$75 million in EBITDA and $0.35 in earnings per share, which led to the downgrade.
The Gap Inc. (NYSE:GPS) is seen to be following the footsteps of Costco Wholesale, with its latest announcement of raise in minimum hourly pay to $9 and $10 per hour for the current and next year respectively. While most of the retailers believe that raising pay is negative on the Balance Sheet, The Gap stands to differ as it acknowledges the link between higher pay and improved results. Analyst sees this move as strength for Gap, which can now drive best talent towards it which implies higher future sales. The Gap Inc. (NYSE:GPS)’s increased wages will benefit 65000 employees of the company.
After a detailed analysis, Bernstein’s Geoffrey Porges has pointed out some concerns over the evergrowing pharma sector. In his report, Porges has named Gilead Sciences, Inc. (NASDAQ:GILD) among its favourites as it enjoys a strong cash flow position and has a very low relative multiple. Porges noted that the market value of biotech sector has crossed $582 billion, setting it at par with beverages, chemicals and heavy equipment companies and he sees the sector to soon cross $600 billion mark. The growth translates into 128% jump in the last two years and three times the growth of the overall market. But the fast pace at which the sector is raising capital is alarming, according to Porges. Based on the higher interest rates and a volatile broader market scenario, he anticipates to sector to lose 40% value in upcoming time.