Nov. 30 (Bloomberg) -- OAO TMK’s stock rating may be cut by Broker Credit Service after Russia’s largest maker of steel pipes for the oil and gas industry reported a 38 percent drop in third-quarter profit as demand for larger-diameter products slowed.
The Moscow-based brokerage firm changed its rating on TMK to “under review” yesterday from “buy.” Broker Credit Service said in a statement that it plans to lower its price target from 98 rubles a share and cut the recommendation in the next two weeks.
“The quarterly results are horrible,” Oleg Petropavlovskiy, a metals and mining analyst at Broker Credit Service, said in a telephone interview. “The revenue plunged because of lower demand and price decreases for seamless and welded pipes, which account for 95 percent of TMK’s revenue.”
Sales volumes will probably increase by 5 percent this year, less than the 7 percent to 8 percent forecast previously, Moscow-based TMK said in a statement.
TMK added 0.1 percent to 83.59 rubles is Moscow yesterday. The shares are down 45 percent this year.
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