J.P. Morgan Initiates Coverage On TMS International

J.P. Morgan Chase & Co. is initiating coverage on shares of TMS International TMS with an Overweight rating and a $17 price target. In a note to clients, J.P. Morgan writes, "We view TMS, a provider of outsourced services to the steel industry, as a low- risk play on a recovery in steel market fundamentals, with a largely contracted business model, limited pricing exposure and highly variable cost structure. We expect a growing trend toward outsourcing to help provide an accommodative growth backdrop, with emphasis on overseas markets. Our $17.00 YE11 price target assumes 6.25x '12E EV/EBITDA, in line with peers despite superior margins and comparable growth, and implies 22% upside, attractive vs. our universe." Shares of TMS lost 6 cents yesterday to close at $13.92, a loss of 0.43%.