Aug. 6 (Bloomberg) -- Usinas Siderurgicas de Minas Gerais SA, the Brazilian steelmaker that posted losses in three of the past six quarters, jumped to a two-month high after Goldman Sachs Group Inc. raised its earnings estimates for the company.
Usiminas, as the Belo Horizonte, Brazil-based company is known, gained 7.8 percent to 8.52 reais at the close in Sao Paulo, the highest since May. 30. The stock, which has lost 16 percent this year, was the biggest gainer in the Brazilian benchmark Bovespa index.
Goldman Sachs increased its estimates for Usiminas’ earnings before interest, taxes, depreciation and amortization in the 2012-2014 period by 13 percent, analysts led by Marcelo Aguiar in Sao Paulo said in today a note to clients. The analysts, which also lifted their 12-month share price target to 9.8 reais from 8.5 reais, forecast a “significant profitability rebound.”
“The combination of higher volumes, mostly in the domestic market, lower costs and higher steel prices, should improve Usiminas’ operating margins throughout the second half of 2012,” the analysts wrote.
Usiminas has surged 52 percent in the past nine sessions compared with the Bovespa’s 11 percent gain. Goldman Sachs raised its recommendation on the stock to buy from sell on July 30.
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