Jefferies sees upside risk to BlueScope Steel's second-half earnings
Jefferies keeps its buy rating on BlueScope Steel with a A$40 target and expects first-half EBIT at A$960 million, the top of guidance.
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what happened
Jefferies analysts remain bullish on Australian steelmaker BlueScope Steel. According to Market Talk, the current strength of U.S. steel spreads supports this stance.
Jefferies expects the company's first-half EBIT to reach A$960 million, at the top end of its A$860 million to A$960 million guidance. Analyst Ramoun Lazar said that spot prices of US$890 per ton and consensus assumptions of US$650 point to further upgrade risk for the second half of fiscal 2027. Jefferies has modeled US$700 per ton for the second half.
The bank estimates an 8% free cash flow yield for fiscal 2027, which it says would support more than A$1 billion in annual shareholder returns. The buy rating and A$40.00 per share price target are unchanged. The shares ended Tuesday at A$32.83.
why it matters
For markets, this highlights how sensitive steelmakers' earnings are to U.S. steel prices. The gap between spot prices and consensus forecasts makes possible estimate revisions relevant for sector investors. The story concerns a single company, so its impact on the broader market is limited.
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sources
- BlueScope Steel Could Positively Surprise in 2H — Market Talk, 20 October 2026 at 22:36 UTC
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