Reinitiating on Posco With No-Moat, Stable Trend Ratings and FVE of KRW 324,000; Stock Fairly Valued
We are reinitiating coverage on Posco with no-moat and stable moat trend ratings, along with a fair value estimate of KRW 324,000 per share ($71 per ADR). Our fair value estimate implies a P/E ratio of 11.2 times and an enterprise value/EBITDA ratio of 6 times, based on 2017 forecasts. We think the shares are fairly valued at the current price, as the prospect of strong steel prices has been mostly priced in.In view of the challenging environment in the steel industry, Posco has laid out a medi...
POSCO is engaged in the manufacture and distribution of steel rolled products and plates in the domestic and overseas markets. Co. manufactures and sells a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets. Also, Co. is able to meet a broad range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries. Co. operates two steel plants, Pohang Works and Gwangyang Works in the Republic of Korea.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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