2 Steel Stocks Stalled By GM Strike

Both AK Steel and U.S. Steel are surrounded by pessimism

J.P. Morgan Securities weighed in on the steel industry today, and the results weren't pretty. AK Steel Holding Corporation (NYSE:AKS) was downgraded to "underweight" from "overweight," while United States Steel Corporation (NYSE:X) saw its rating cut to "neutral" from "overweight," and price target trimmed to $14 from $26. The brokerage firm cited the fluctuating price of steel as a headwind, as well as the ongoing strike at General Motors with the United Auto Workers (UAW) union.

At last check, AK Steel stock is down 2.5% to trade at $2.36, heading to its fifth straight loss and just barely clinging to its year-to-date breakeven level. AKS remains 42% off its May 31 three-year low of $1.66, but has seen recent rallies rejected by the $3 area.

Today's downgrade is nothing new though. In the analyst community, eight out of nine in coverage rate the equity a "hold" or "sell," and the consensus 12-month price target of $2.02 is a 16.9% premium to Friday's closing perch of $2.43.

Looking at U.S. Steel, the stock is down 0.7% to trade at $10.73, also on track for its fifth straight session in the red. Year-over-year, X has given back 63%.

Similar to its sector peer, most analysts are staying away from X. There are 12 brokerages covering the security, and 10 rate it a "hold" or worse. Meanwhile, its average 12-month price target of $11.67 sits 8% above Friday's closing perch of $10.81.