BlueScope Steel Limited

BSL Details
· Surpassing the guidance: BlueScope Steel Limited (ASX: BSL) stock rallied over 7.99% on January 24, 2017 as the group’s performance has improved and is set to surpass the expectations. The group reported that it expects preliminary unaudited underlying earnings before interest and tax (EBIT) of over $600 million for the six months ended December 31, 2016 which is an outstanding increase of 160% against the first half of fiscal year of 2016. This performance is much higher than their earlier guidance of $510 million. Recovering steel prices and spreads across their businesses especially their Australian Steel Products and New Zealand and Pacific Steel operations drove their performance. Moreover, the group’s ongoing productivity improvements further contributed to their performance. Building Products division was driven by North American business while India business also generated positive earnings growth driven by margins and volumes.

· Recommendation: BSL stock rallied over 29.6% in the last six months (as of January 23, 2017) and we believe this momentum would continue in the coming months. We maintain a “Hold” recommendation on the stock at the current price of - $ 11.21

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