Klöckner downgraded to "hold"

09.10.07 - Deutsche Bank

LONDON, October 9 (newratings.com) - Analyst Matthias Pfeifenberger of Deutsche Bank downgrades Klöckner & Co AG (KCO) from "buy" to "hold." The target price has been reduced from ?64 to ?47.

In a research note published this morning, the analyst mentions that the company has issued a profit warning on account of weak Q3 margins, pricing and stainless windfall losses. Chinese export discipline, international growth and input cost pressures are likely to result in potential steel price hikes and more robust demand in 2008, the analyst says. The visibility into the company?s mid-term performance has declined and net debt/WC from Klöckner?s acquisitions is likely to be higher than anticipated going forward, Deutsche Bank adds.