Cia. Siderurgica Nacional SA, Brazil’s third-largest steelmaker, fell to the lowest in more than seven years after Goldman Sachs Group recommended investors sell the stock because of deteriorating iron-ore results.
CSN slid 2.2 percent to 8.43 reais at the close of trading in Sao Paulo, the lowest since January 2006. Trading volume on the stock was almost twice the three-month daily average, according to data compiled by Bloomberg. The benchmark Bovespa index rose 0.7 percent.
The company, based in Sao Paulo, may post lower-than-expected operating results during the next four quarters due to possible delays on projects at its iron-ore unit, Goldman analysts Marcelo Aguiar and Diogo Miura said in a note to clients today. They downgraded the stock to sell from neutral.
“The key factor behind our negative view on CSN is the lack of execution and growth strategy,” the Sao Paulo-based analysts wrote. “Declining iron-ore prices, low investment returns and high leverage should significantly dilute the company’s consolidated returns.”