Views upbeat on centers; ranks mixed

Jun 10, 2009 | 01:06 PM | Corinna Petry

Generally upbeat views of the service center industry still landed one center mixed ratings outlooks from analysts.

KeyBanc Capital Markets Inc. lowered its investment rating on Los Angeles-based Reliance Steel & Aluminum Co. to "hold" from "buy" this week, noting that although the national service center chain has a solid capital structure and positive long-term risk-reward ratios, "we sense greater near-term upside in companies with more exposure to consumer-sensitive flat-rolled end-markets."

Cleveland-based KeyBanc sees this greater upside in Bedford Heights, Ohio-based distributor and processor Olympic Steel Inc., and raised that company's rating to "buy" from "hold," with a $25-per-share price target established given its earnings leverage to flat-rolled pricing upside and significant cost-reduction momentum.....