) to buy from neutral.
Analyst Trip Rodgers says he now expects the company's steel segment to earn $87 million in fiscal year 2005 (May), vs. its $40 million loss runrate only two quarters ago. He ties the dramatic turnaround in steel to: 1) recovery in soaring scrap costs via price surcharge and higher base rates; 2) elimination of imports by a weak dollar and lofty freight rates; 3) improvement in demand; 4) increased utilization at the company's Virginia plant.
Citing the company's large operating leverage, Rodgers narrows his 72 cents fiscal year 2004 loss estimate to 7 cents per share. He ups $1.32 fiscal year 2005 EPS forecast to $2.90 EPS and $2.50 fiscal 2006 EPS estimate to $3.70 EPS. He also raises his $38 stock price target to $43.