Investing.com – CSN reported on Thursday (15) its highest quarterly EBITDA ever recorded in 3Q20, of R $ 3.5 billion, 122% above last year’s result, 15% above analyst consensus and 17% above the Safra projection. As a result, the bank raised its target price for the company’s shares, from R $ 17.6 to R $ 23, maintaining a Purchase rating believing that there is still room for appreciation.
Goldman Sachs, on the other hand, considering the results and net debt, the market value of CSN’s stake in Usiminas (SA :), the prepayment of iron ore and possible risks, maintains a Neutral rating for the shares, with price- target of R $ 18.
At 4:40 pm, it operated at R $ 19.51, up 0.31%.
The company’s results were strong in all segments, the main one being mining, driven by higher volumes, better prices and a lower cost per ton. In the steel division, the main highlights were domestic volume and higher prices. Finally, the cement unit also stood out, as the strong construction activity drove higher volumes and prices.
One of the highlights of the quarter was the cash growth due to the strong operating performance, which led to a leverage of 3.7x net debt / Ebitda, against 5.2x in the second quarter. For Goldman Sachs, the company should be able to reach its target of about 3x by the end of 2020.
Factors that, in Goldman’s view, could make the stock’s performance better than expected are higher prices for steel and iron ore, a greater-than-expected devaluation of the real and the potential sale of assets with funds used to reduce leverage.
Goldman points out that the main risks, on the other hand, are lower steel and iron ore prices and operational risks. Safra also adds the slowdown in Chinese demand, a slower-than-expected recovery of Brazilian GDP and the depreciation of the dollar.
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