U.S. Steel downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded U.S. Steel (X) to Equal Weight from Overweight with an unchanged price target of $39. The firm still believes the company’s investments will lead to a “meaningful uplift” in both EBITDA and free cash flow. However, while Morgan Stanley still sees the merits of U.S. Steel’s growth projects, it says much of the company’s transformation is now priced in with the stock. U.S. Steel is trading very close to a Morgan Stanley’s standalone valuation, suggesting a more balanced risk/reward profile, the analyst tells investors in a research note.