Is it a buy? Here’s what brokers are predicting for the BlueScope (ASX:BSL) share price in 2022

The experts are expecting big things for the steel giant’s stock next year. Here are the details
The post Is it a buy? Here’s what brokers are predicting for the BlueScope (ASX:BSL) share price in 2022 appeared first on The Motley Fool Australia. –

The BlueScope Steel Ltd (ASX: BSL) share price has reclaimed some territory in December and jumped by 4% yesterday to close at $21.91.

The price of steel rebar has bounced off a low of 4303 Chinese Yuan per tonne (CNY/T) to now trade at more than 4651 CNY/T in December. That gain has inflected positively for the BlueScope share price.

Zooming out over a wider timer frame, it’s clear there’s been an all-out war between the bulls and the bears since late September.

BlueScope shares have traded within a tight range of around $1 over that time, meaning the trend channel has been largely sideways. Prices have been capped at $21 at the upper resistance mark and have hit and/or nudged past that level 10 times in the last 3 months. Meanwhile, prices have had good support at the $20 level from the bottom as well.

With this in mind, and with mixed commentary around the price of steel, let’s look at what the experts are saying about the outlook for BlueScope as an investment in 2022.

What are the brokers saying?

According to the team at Jefferies, BlueScope could be a buy right now. The firm recently upgraded it to a buy, and now values the company 7.4% higher at $24.60 per share.

Jefferies notes that it overshot its estimates on how quickly spreads would compress when it downgraded BlueScope to a hold back in September.

Analysts at the firm reckon market expectations on steel and BlueScope are too pessimistic. They note that “estimates look much too low and seemingly ignore the growth initiatives being actively pursued by BSL across its portfolio”.

These initiatives are yet to be priced in by the market, Jefferies says. It reckons 2022 might be a year of inflection for the BlueScope share price given the recent volatility, which could offer opportunities.

JP Morgan agrees with its fellow broker and also retained its buy rating in a recent note to clients. The firm has “factored in the latest forward curves for steel prices, along with lower iron ore prices”, even when downgrading its CY22 iron ore price by 12% to $92/tonne.

The firm also made both 13% and 9% cuts to East Asia and US hot-rolled coil (HRC) prices that reduce its FY22/23 earnings before interest and taxes (EBIT) estimates by 6% and 25%, respectively. These now sit at 7% and 10% above the consensus figure, according to the release.

JP Morgan is heavily bullish on the BlueScope share price. It reckons the company will continue to top up its $500 million share buyback program by another $500 million–$750 million with the February results (equivalent to over 10% of market capitalisation).

It subsequently revised its free cash flow yield estimates to 29% in FY22 and 15% in FY23 – figures that help prop up BlueScope’s buyback program – and adjusts its valuation on the company to $30 per share.

In fact, in the list provided by Bloomberg Intelligence, 62% of the brokers covering BlueScope support it as a buy coming into 2022. The remainder have it as a hold or sell.

The consensus price target is $25 from this list, implying around $3 of upside potential at the time of writing.

BlueScope share price summary

Despite the recent volatility, the BlueScope share price has climbed by more than 23% in the last 12 months. It has also rallied 25% this year to date.

In the last month, it has gained around 5%, beating the benchmark S&P/ASX 200 index (ASX: XJO)’s return in that time.

In early trade today, it is slipping 0.78% to $21.74.

The post Is it a buy? Here’s what brokers are predicting for the BlueScope (ASX:BSL) share price in 2022 appeared first on The Motley Fool Australia.

Should you invest $1,000 in BlueScope Steel right now?

Before you consider BlueScope Steel, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and BlueScope Steel wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Here are the top 10 ASX shares today

Why this broker is tipping 58% upside for Bluescope (ASX:BSL) shares

ASX 200 (ASX:XJO) midday update: AMP shares jump, Collins Foods impresses

Why has the Bluescope (ASX:BSL) share price had such a tough time in November?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!