Evraz’s 2016 Ebitda Target ‘Too Ambitious,’ Morgan Stanley Says

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.

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