Shares of U.S. Steel Corp. slumped 2.1% toward a six-month low in premarket trade Wednesday, after the steel maker was downgraded at Cowen & Co., citing an increased risk profile given uncertainty over the earnings outlook. Analyst Novid Rassouli cut his rating to market perform, about 2 1/2 months after upgrading it to outperform. He slashed his stock price target to $21, which is just 1% above Tuesday's closing price of $20.79, from $60. Rassouli said that when he upgraded U.S. Steel, it was predicated on an improvement for the tubular operations, but operational issues at the flat-rolled segment has forced the company to undertake "a dramatic revitalization" at one of the most profitable points in the cycle. And given the lack of earnings visibility, in the wake of disappointing first-quarter results, Rassouli said the historical multiple "should receive a full turn discount" because of the higher risk profile. The stock has plunged 37% year to date through Tuesday, while the VanEck Vectors Steel ETF has lost 3.9% and the S&P 500 has gained 7.1%.
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