(SID) Companhia Siderurgica Nacional – ADR- Bear of the Day

Brazilian steel company Companhia Siderurgica Nacional, or CSN (SID) posted satisfactory fourth quarter results with EPADR of roughly 31 cents per share, much above the Zacks Consensus Estimate of 20 cents per share. Despite a few positives, there are a few irrefutable downsides pertaining to the stock of the company at present.

These downsides include rising costs of goods sold, presence of serious competition and foreign market fluctuations, which are adversely affecting sales of the company in the clouded fiscal scenario. Earnings estimates for 2012 have decreased on a year over year basis.

Thus, we are downgrading shares to an Underperform recommendation from a previous sideline view on the stock at present. Our target price on the stock is $8.50, based on a 2012 P/E multiple of 8.6x.

CIA SIDERUR-ADR (SID): Free Stock Analysis Report

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