Evraz Plc, Russia’s largest producer of steel by output, appears “too ambitious” with its forecast of $5 billion in earnings before interest, tax, depreciation and amortization for 2016 as prices fall, Morgan Stanley said.
“In our base case forecast, the company will deliver 38 percent less, or $3.1 billion, in 2016,” Dmitry Kolomytsyn, a Morgan Stanley analyst in Moscow, said today in a report.
Evraz assumes average steel prices in 2016 will be 10 percent higher than 2011, while Morgan Stanley expects a 10 percent to 20 percent decline, according to Kolomytsyn.
Hot-rolled steel coil exported from the Black Sea is near a two-year low of about $540 a metric ton, according to Metal Bulletin data. Evraz posted Ebitda of $2.8 billion last year.