POSCO (PKX) is the largest steel producer in Korea. The company’s product line includes hot-rolled and cold-rolled products, plates, wire rods, silicon steel sheets and stainless steel products.
POSCO’s expansion into fast-growing markets and wide regional diversification should pull it through difficult situations in the future. However, competition from global steel manufacturers with expanded production capacity could result in significant price competition, declining margins and reductions in revenue.
Nevertheless, a slight improvement in the global steel market has pushed revenues in the positive direction, which is going to continue in the coming years. Thus, we upgrade our recommendation on the ADR from Neutral to Outperform.Zacks Investment Research
