RBC Capital has begun coverage of Algoma Steel (ASTL, Financial) with a Sector Perform rating, setting a price target of C$8. The analysis highlights potential challenges for the company's immediate financial performance due to tariff impacts.
According to RBC's assessment, Algoma Steel might face significant pressure on its profit margins as Canadian steel producers, including Algoma, are expected to sell their products in the U.S. market at a 25% discount compared to U.S. benchmark prices. This discount is a consequence of the prevailing tariffs, which could hinder near-term profitability.
