BMO Capital analyst Katja Jancic has maintained their neutral stance on EAF stock, giving a Hold rating on February 6.
Katja Jancic has given her Hold rating due to a combination of factors impacting GrafTech International. The company is currently grappling with ongoing weakness in demand and pricing for its products. Despite proactive measures to slash costs and streamline operations, these efforts are not anticipated to significantly enhance results in the near term. Although GrafTech has a reasonable liquidity position of $289 million, the market’s continued uncertainties and pricing pressures present substantial obstacles that may hinder the company’s performance.
In her analysis, Jancic points out that while GrafTech is expecting a modest year-over-year improvement in graphite electrode sales volumes in 2024, overall demand is projected to remain soft, with pricing likely to stay suppressed. GrafTech’s cost-cutting initiatives are on track to reduce expenses by about $25 million by the end of the second quarter of 2024, but even with these measures and some input cost decreases, Jancic expects the cost of goods sold per tonne to decline less than initially projected. Due to these factors, coupled with a downward adjustment in sales volume and price assumptions, Jancic has lowered the 2024 EBITDA estimate significantly, leading to a cautious stance on the stock with a Hold rating.
Jancic covers the Basic Materials sector, focusing on stocks such as Algoma Steel Group, Nucor, and Steel Dynamics. According to TipRanks, Jancic has an average return of 13.9% and a 75.00% success rate on recommended stocks.
In another report released on February 6, RBC Capital also maintained a Hold rating on the stock with a $3.00 price target.
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GrafTech International (EAF) Company Description:
GrafTech International Ltd. manufactures graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. The firm also produces needle coke products which is a raw material to producing graphite electrodes. Its customers include steel producers and other ferrous and non-ferrous metal producers in Europe, the Middle East and Africa, the Americas and Asia-Pacific, which sell its products into the automotive, construction, appliance, machinery, equipment and transportation industries. The company was founded in 1886 and is headquartered in Independence, OH.
Read More on EAF:
- GrafTech expects modest year-over-year improvement in sales in FY24
- GrafTech reports Q4 adjusted EPS (27c), consensus (12c)
- Graftech Intl (EAF) Q4 Earnings Cheat Sheet
- GrafTech Board Changes: Clegg Resigns, Donoso Appointed
- SHAREHOLDER ALERT: Potential Recovery for GrafTech International Ltd. (EAF) Investors
