Salzgitter lowers forecast: stock crashes after a disappointing quarter

Salzgitter lowers forecast: stock crashes after a disappointing quarter

A dark mood is at Salzgitter AG. The company drastically corrected its annual forecast after a weak second quarter. The new expectations provide for sales between 9.0 and 9.5 billion euros after 9.5 to 10 billion euros have been forecast. The operational result (EBITDA) is also greatly reduced and is now only between 300 and 400 million euros - before that it was 350 to 550 million euros. The input tax result is expected to be calculated with a loss between 100 and 0 million euros, while it was a balanced balance in the previous year.

The outer turnover is particularly worrying, which has dropped by almost 12 % to just 2.3 billion euros in the second quarter. The EBITDA fell dramatically from 107.3 million euros to 38.2 million euros. In the same breath, the company reported a loss of 56.5 million euros before tax - in the previous year it was only 5.7 million euros. The pressure due to the weak economy and the falling steel demand runs through the entire year, as the shareholder reports.

analyst opinions and market development

Analysts are also skeptical. JPMorgan maintained the "Underweight" assessment, with a price target of 18.40 euros. The current pre -exchangeable course was 26.24 euros on July 17, which corresponds to a decline of 8.96 %. Only two analysts recommend buying the share, seven installments to keep them while four are on the sales list. The average recommendation for the Salzgitter share has deteriorated to "reduce". The average price target is now 23.51 euros with a distance of 10.40 %, while the high -speed goal with 45.00 euros plus 71.49 % distance upwards looks quite optimistic.

This development is in the context of the general market situation, which is characterized by a falling raw steel production in Germany. According to the [WV Stahl] (https://www.wvstahl.de/beann. This is the third month in a row with a double -digit decline, which indicates a persistently weak demand.

steel industry with challenges

to the steel industry, numerous challenges are currently loading. Production in the blast furnace converter route has dropped by over 13 %, while electrical steel production shows positive signs. This market environment also complicates business for Salzgitter AG, which must react to massive declines in the previous course of the year. The cyclical steel business remains tense and the chart technology of the share is struck-with critical level of support at 23.80 euros and 21.77 euros, while the 90-day line runs at 22.56 euros.

In order to overcome the ongoing difficulties, it will be decisive for Salzgitter AG to adapt to the market changes and to develop new strategies. However, the forecasts for global steel demand indicate slight recovery by about 1 % next year, which could be a little ray of hope in an overall challenging situation.