Corus: Traders Thread, Long or Short

Don't rub these bustards! No wonder a nice positive morning turned sour yesterday.

HSBC Downgrades Corus To Underweight

Thursday, December 22, 2005 8:54:02 AM ET
Dow Jones Newswires

1232 GMT [Dow Jones] HSBC cuts Corus (CGA) to underweight from neutral. "Corus has risen by 30% in the past 10 weeks, outperforming the FTSE by 24%." Notes Corus '06 PE and EV/EBITDA is now at a 14% premium to the European steel sector. "We have assumed that quarterly contract steel prices in Europe will rise by EUR10/tonne in 1Q CY 2006," HSBC adds. However, notes steel traders point to overproduction in Italy (reflecting weak demand for consumer durables) as a risk. "Flat pricing in 1Q 2006 now seems a likely outcome." Says Corus is most exposed to any weakness in the spot market. Trades -0.9% at 58p. (SMT)