Hulk Hogan, wrestling icon, dies at 71 in Florida home
On Wednesday, UBS analysts initiated coverage on Usiminas (USIM5:BZ) (OTC: OTC:USNZY) with a Neutral rating and a price target of R$7.00. The flat steelmaker has experienced significant challenges over the past decade and a half, including changes in control, shareholder disputes, operational incidents, and major asset shutdowns. These issues have led to the stock trading at a low multiple, specifically at just 0.3x its projected 2025 Price-to-Book value. InvestingPro data shows the company is currently undervalued, with a market capitalization of $1.24 billion and weak gross profit margins of 6.42%.
UBS’s coverage begins as the company shows signs of potential recovery under the new management of Ternium, recognized as one of the leading steel operators in Latin America. The analysts see a "light at the end of the tunnel" for Usiminas but also caution that the path to recovery may be uneven and will likely take time. According to InvestingPro analysis, the company maintains a strong liquidity position with a current ratio of 3.64 and operates with a moderate debt level, providing some stability during the recovery phase.
According to UBS analysts, there is now increased visibility on how Usiminas might return its margins to normalized levels of around 15%, compared to the current approximate 6%. However, they note that a full recovery is not immediate and that the stock’s partial recovery appears to be already factored into its current valuation.
The stock is currently trading at 3.2x its estimated 2025 EV/EBITDA and is generating a free cash flow yield of around 5%, which the analysts believe fairly represents the company’s financial outlook. The price target of R$7.00 reflects UBS’s assessment of the stock’s fair value based on these projections.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.