I don't want to be flippant about it, but it seems hard to remember a time when Harsco (NYSE:HSC) wasn't a recovery/turnaround story.
The company has been working for years to improve its Metals and
Minerals business, and management has taken several logical steps to
exit or improve underperforming contracts, but it is hard to make
progress fixing a steel mill services business when the steel mills
themselves are struggling.
I'm not completely certain that Harsco
can get back to a point where it earns a return on capital in excess of
its cost of equity capital, but it's going to take several years to find
out. You could argue that Harsco is undervalued, particularly on an
EV/EBITDA basis, but I believe it is going to take a meaningful recovery
in steel mill utilization to drive that recovery and I don't see that
as especially likely in the near term.
Follow this link for the full article:
Sluggish Markets Dragging Out Harsco's Recovery
No comments:
Post a Comment