Deutsche Bank’s Near-Term Outlook Remains Positive For Steel Stocks

Freeport-McMoRan Copper & Gold Inc FCX posted its Q2 EPS in-line with estimates. Deutsche Bank says, “We have trimmed our 2011E EPS by 6% to $8.96 on a 20% cut in FCX gold guidance and higher Tenke costs. FCX's net debt fell QoQ to US$1.7bn and remains on track to be cash positive by 1Q11. Still, with no change in capex or dividend policy and China still tightening we await a catalyst.” Peabody Energy Corporation BTU Q2 earnings beat estimates on “higher margins that mainly resulted from lower costs.” The analysts mention, “Also, BTU raised its 2010 outlook modestly and it should benefit in the long-term from a roster of growth projects and tight fundamentals in the global coal markets. Given its attractive asset base in the US & Australia and valuation.” “Steel inventories at Service Centers in North America rose 4% m/m in June to 8.7MM tons, and these compare to a trough of 6.6MM tons in 8/09 and a 'cyclical' peak of 12.7MM tons in 8/08…. Despite lackluster data, the near-term outlook for steel stocks remains positive as commodities sentiment has improved in China,” Deutsche Bank adds. More Analyst Ratings here