POSCO (NYSE:PKX) Shares Gap Up - Should You Buy?

Key Points

• POSCO shares jumped 6.3%, opening at $52.79 versus a prior close of $49.67, despite trading below both its 50-day and 200-day moving averages.
• Quarterly revenue beat expectations at $14.10 billion versus $13.51 billion, but EPS significantly missed estimates at $0.59 versus $1.16, while profitability remained weak with a 1.79% net margin and 1.99% return on equity.
• Analyst sentiment is mixed—one Buy, one Hold and one Sell—with an overall Hold rating; stronger results at POSCO International and POSCO Future M were offset by weaker performance at other affiliates, including an operating loss at POSCO Steeleon.

POSCO (NYSE:PKX - Get Free Report)'s share price gapped up prior to trading on Monday. The stock had previously closed at $49.67, but opened at $52.79. POSCO shares last traded at $52.8090, with a volume of 26,085 shares changing hands.

Trending Headlines about POSCO

Here are the key news stories impacting POSCO this week:

• Positive Sentiment: POSCO reported quarterly revenue of $14.10 billion, exceeding the $13.51 billion consensus estimate. The revenue beat may have supported the stock as it suggests demand and sales remained relatively solid. POSCO earnings report and conference call
• Positive Sentiment: POSCO International reported strong year-over-year third-quarter profit growth, providing a positive contribution to the group’s earnings narrative and helping offset weakness in other subsidiaries. POSCO International third-quarter profit growth
• Positive Sentiment: POSCO Future M reported sharp third-quarter profit growth, potentially improving sentiment around POSCO’s battery-materials businesses, although the subsidiary remains exposed to volatility in electric-vehicle and battery markets. POSCO Future M operating profit growth
• Neutral Sentiment: POSCO DX showed a quarterly recovery, but its nine-month results were weaker, creating a mixed outlook for the group’s technology and industrial-solutions operations. POSCO DX quarterly recovery
• Negative Sentiment: POSCO’s earnings per share came in at $0.59, well below the $1.16 consensus estimate. Return on equity was only 1.99% and net margin was 1.79%, highlighting continued pressure on profitability. POSCO quarterly earnings results
• Negative Sentiment: POSCO Steeleon reported sharply lower profit and an operating loss in separate updates, adding evidence of uneven performance among POSCO affiliates. POSCO Steeleon operating loss

Analysts Set New Price Targets

PKX has been the subject of a number of research analyst reports. Wall Street Zen raised POSCO from a "hold" rating to a "buy" rating in a report on Saturday, August 1st. Weiss Ratings downgraded POSCO from a "hold (c-)" rating to a "sell (d+)" rating in a report on Friday, October 9th. Finally, Zacks Research cut POSCO from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, September 29th. One equities research analyst has rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has an average rating of "Hold".

POSCO Trading Up 6.3%

The firm has a 50-day moving average of $57.54 and a 200 day moving average of $61.13. The company has a market cap of $15.98 billion, a P/E ratio of 20.00 and a beta of 1.75. The company has a current ratio of 1.98, a quick ratio of 1.37 and a debt-to-equity ratio of 0.30.

POSCO (NYSE:PKX - Get Free Report) last released its quarterly earnings results on Monday, November 2nd. The basic materials company reported $0.59 EPS for the quarter, missing analysts' consensus estimates of $1.16 by ($0.57). The company had revenue of $14.10 billion during the quarter, compared to analysts' expectations of $13.51 billion. POSCO had a net margin of 1.79% and a return on equity of 1.99%. On average, analysts predict that POSCO will post 4.91 earnings per share for the current fiscal year.

Institutional Trading of POSCO

Institutional investors have recently modified their holdings of the company. Bell Investment Advisors Inc boosted its holdings in POSCO by 62.4% in the third quarter. Bell Investment Advisors Inc now owns 557 shares of the basic materials company's stock valued at $31,000 after acquiring an additional 214 shares in the last quarter. Inspire Investing LLC boosted its holdings in shares of POSCO by 25.7% during the 3rd quarter. Inspire Investing LLC now owns 2,053 shares of the basic materials company's stock valued at $116,000 after buying an additional 420 shares in the last quarter. GAMMA Investing LLC lifted its holdings in shares of POSCO by 6.9% during the third quarter. GAMMA Investing LLC now owns 9,118 shares of the basic materials company's stock valued at $514,000 after purchasing an additional 588 shares during the last quarter. Compound Planning Inc. boosted its holdings in POSCO by 9.9% in the first quarter. Compound Planning Inc. now owns 9,066 shares of the basic materials company's stock worth $530,000 after acquiring an additional 819 shares in the last quarter. Finally, Vise Technologies Inc. raised its holdings in POSCO by 4.4% in the third quarter. Vise Technologies Inc. now owns 22,331 shares of the basic materials company's stock worth $1,260,000 after buying an additional 938 shares during the last quarter.

POSCO Company Profile

POSCO is a South Korean steel producer and one of the world's major integrated steelmakers. The company manufactures a broad range of steel products, including hot- and cold-rolled steel, heavy plate, wire rod, stainless steel, galvanized steel, automotive steel and electrical steel.

POSCO operates large integrated steelworks in Pohang and Gwangyang, South Korea. Its products are used in automobiles, shipbuilding, construction, energy infrastructure, appliances and other industrial applications.

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