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BlueScope Steel Limited (BLSFY)
OTHER OTC:BLSFY
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BlueScope Steel
(OTC:BLSFY)
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Rating:68Neutral
Price Target:
$112.00
▲(11.38% Upside)
Action:ReiteratedDate:02/17/26
The score is driven primarily by mixed financial performance (strong balance sheet but weak margins and cash flow) and a constructive earnings outlook with upgraded capital returns and positive H2 guidance. Technicals are supportive with a clear uptrend and positive momentum signals. The main offset is valuation, with a very high P/E despite an attractive dividend yield.
Positive Factors
Balance sheet strength
An essentially ungeared balance sheet with ~$3.2bn liquidity provides durable financial flexibility to fund capital projects, withstand cyclical steel price swings, support operations during downturns and underpins the company’s ability to maintain dividends and execute strategic investments without forced asset sales.
Upgraded capital return framework
A commitment to return >=75% of free cash flow and a defined $3.00/share program formalizes capital allocation discipline, aligns management incentives with cash generation, and signals confidence in medium‑term cashflows — strengthening long‑term investor alignment and capital markets credibility.
Capacity projects & growth roadmap
Near‑term capacity and premium coating additions plus a clear $500m EBIT target by 2030 reflect structural earnings upside from higher utilization, premium products and efficiency gains. Realized capacity increases materially de‑risk future volume constraints and support sustainable margin expansion.
Negative Factors
Weak free cash flow generation
Severely lagging free cash flow growth and low FCF conversion constrain the firm’s ability to self‑fund investments and shareholder returns during heavy CapEx phases. Persistent weak cash generation raises reliance on liquidity or higher leverage if capex or distributions remain elevated.
Exposure to low Asian steel spreads
Structural oversupply and weak Asian spreads keep realised prices under pressure, making margins highly cyclical. Given the company’s sizable Asian/Australian footprint, prolonged low spreads can erode profitability and weaken returns even if domestic operations perform well.
Operational & turnaround risks
Ongoing BCP turnaround losses, transition costs for the NZ EAF and a recent fatality highlight execution, safety and commissioning risks. These structural operational issues can delay productivity gains, extend cash outflows and increase reputational and compliance costs over the medium term.
BlueScope Steel (BLSFY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.60B
Dividend Yield2.06%
Average Volume (3M)157.00
Price to Earnings (P/E)6.8
Beta (1Y)1.21
Revenue Growth-5.62%
EPS Growth-88.83%
CountryUS
Employees16,500
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)3.08
Shares Outstanding87,615,486
10 Day Avg. Volume94
30 Day Avg. Volume157
Financial Highlights & Ratios
PEG Ratio-1.31
Price to Book (P/B)0.92
Price to Sales (P/S)0.61
P/FCF Ratio54.83
Enterprise Value/Market Cap1.47
Enterprise Value/Revenue0.77
Enterprise Value/Gross Profit6.05
Enterprise Value/Ebitda10.95
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)6.64
Revenue Forecast (FY)$11.61B
BlueScope Steel Business Overview & Revenue Model
Company DescriptionBlueScope Steel Limited produces and sells metal coated and painted steel building products in Australia, New Zealand, Thailand, Indonesia, Malaysia, Vietnam, North America, the Pacific Islands, and Asia. The company operates through five segments: Australian Steel Products, North Star BlueScope Steel, Building Products Asia & North America, Buildings North America, and New Zealand & Pacific Islands. It offers steel slabs, plates, hot and cold rolled coils, coated and painted strip products, roof and wall claddings, and purlins and house framings under the LYSAGHT steel building products, COLORBOND steel, COLORSTEEL, ZINCALUME steel, GALVABOND steel, GALVASPAN steel, BlueScope Zacs, and SuperDyma brands. The company also provides engineered building solutions to industrial and commercial markets under the Butler, Varco Pruden, EcoBuild, and PROBUILD brands. It serves customers in the residential and non-residential building, and construction; manufacturing, automotive and transport, agricultural, and mining industries directly, as well as through a network of service centers and steel distribution businesses. The company was formerly known as BHP Steel Limited and changed its name to BlueScope Steel Limited in November 2003. BlueScope Steel Limited was founded in 1885 and is headquartered in Melbourne, Australia.
How the Company Makes MoneyBlueScope Steel generates revenue through several key streams, primarily by selling steel products and solutions. The company's core revenue comes from its flat steel products, including hot rolled, cold rolled, and coated steel, which are sold to manufacturers and construction companies. Additionally, BlueScope earns income from its building products division, which offers pre-engineered steel buildings and roofing products. The company also benefits from international operations, exporting products to markets in Asia and North America. Significant partnerships with various industrial clients and construction firms enhance BlueScope's market presence and contribute to stable revenue generation. Furthermore, the company's focus on innovation and efficiency in production processes helps to reduce costs and improve margins, ultimately impacting its profitability.
BlueScope Steel Earnings Call Summary
Earnings Call Date:Feb 15, 2026
(Q2-2026)
| Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Positive
The call is overall positive. Management reported a strong H1 operating performance (underlying EBIT up sharply YoY), an essentially ungeared balance sheet at the half, clear project progress and substantive cost savings realized. Management upgraded shareholder returns materially (targeting $3.00 per share in 2026 and 75% of free cash flow), provided constructive H2 guidance, and laid out credible growth and property realization programs. Notable headwinds remain — sustained low Asian spreads, transitional costs in New Zealand, an ongoing BCP turnaround and a recent safety fatality — and the company is modestly increasing its net debt target. On balance, the positives (earnings, liquidity, returns, project delivery and cost programs) outweigh the lowlights, yielding a constructive outlook but with clear execution and commodity risk factors to watch.Q2-2026 Updates
Positive Updates
Strong H1 Profitability and Earnings Growth
Underlying EBIT of $558 million for H1, up $249 million on the prior corresponding period (≈81% increase). Reported net profit after tax of $391 million.
Robust Balance Sheet and Liquidity
Net debt of just $2 million at half‑year (essentially ungeared) and liquidity of approximately $3.2 billion; ROIC stable at 8.1% (North America 13.6%, Asia 17.5%).
Upgraded Capital Return Framework
Shareholder distribution target increased to at least 75% of free cash flow (from 50%); plan to deliver $3.00 per share in calendar 2026 (includes $1.00 special, $1.30 annual ordinary – $0.65 interim – plus $310 million on‑market buyback equal to $0.70 per share); >$1.3 billion of distributions expected in 2026.
Positive H2 Guidance
Management expects H2 underlying EBIT of $620 million to $700 million (guided on an FX rate of A$0.70), with North America anticipated to be ≈15% higher than H1 on stronger U.S. steel spreads and volumes.
Major Project Completions Nearing Delivery
Key projects progressing: North Star debottlenecking to unlock +300,000 tpa capacity; Western Sydney metal coating line MTL7 adding 240,000 tpa coating capacity (start‑up mid‑year); Port Kembla plate mill upgrades on track; New Zealand EAF in cold commissioning; #6 blast furnace reline progressing.
Material Cost and Productivity Progress
Existing $200 million program delivered $190 million of annualized benefit (up from $130 million at end FY25, a ≈46% uplift). A new $150 million cost reduction program has been launched with full run rate targeted by start of FY27.
Growth Targets and Upside Roadmap
A $500 million EBIT uplift targeted by 2030 across the group (North America >$200M, Australia >$125M, Asia & New Zealand ≈$150M), supported by capacity and premium product expansion.
Surplus Land Realization Momentum
Accelerating monetization of ~1,200 hectares of surplus land: sale of 33 hectares at West Dapto for $76 million (enabling >350 residential lots), Glenbrook ground lease for a 100 MW battery, and process started for a 65‑hectare Western Port logistics hub.
Regional Operational Highlights
North America underlying EBIT $447 million (up $115 million vs prior half), North Star achieved 100% utilization and a new daily production record; Asia underlying EBIT $97 million (up $27 million) with improved performance across Indonesia, Malaysia and Vietnam; Australia domestic dispatches increased to 1.1 million tonnes and COLORBOND sales of 322,000 tonnes.
Negative Updates
Sustained Low Asian Steel Spreads
Historically low Asian steel spreads (driven by elevated Chinese exports reportedly >120 million tonnes) depressed regional pricing and weighed on Australia realized spreads and export prices, contributing to margin pressure.
Australia ASP Earnings Pressure
Australia underlying EBIT of $122 million in H1, down from $130 million in prior half; management expects a lower Australian result in H2 due to challenging regional spreads and non‑repeat one‑off items.
New Zealand Transition Costs
New Zealand & Pacific Islands reported an underlying EBIT loss of $18 million due to the EAF transition (higher raw material consumption, stock build for commissioning) and elevated electricity costs until EAF is fully operational.
BCP (Buildings & Coated Products) Remains Loss‑Making
BCP in North America is still loss‑making though improving; turnaround continues and management expects reduced losses over time but recovery requires operational fixes and time.
Safety Incident and Ongoing Investigation
Fatality of a contractor during the #6 blast furnace reline project at Port Kembla in November; SafeWork NSW investigation ongoing — company emphasizes safety refocus and priority on improving safety performance.
Cash Flow Impact from Capital Investment
Cash flows remain lower during the heavy capital investment phase (CapEx of $681 million in H1); although CapEx is expected to peak this year and step down in FY27, capital intensity has temporarily reduced free cash flow.
Increased Balance Sheet Leverage Target
Net debt target increased to up to $1.5 billion (from previous $400–800 million), reflecting willingness to deploy balance sheet to fund higher shareholder returns — a modest increase in financial leverage that some investors may view as additional risk.
Realization & Market Volatility Risks
Revenue realization and margins remain sensitive to FX, freight, and spread volatility (company notes law of low numbers where small swings in moving parts can materially impact outcomes); weather and commissioning delays (e.g., MTL7) also pose timing risk.
Company Guidance
Management guided second‑half underlying EBIT of $620–700m (assumes FX $0.70), driven by stronger U.S. spreads and volumes offsetting softer Asian spreads and currency headwinds, and announced a rebased capital return program to deliver $3.00 per share in calendar 2026 (comprising a $1.00 special, $1.30 annual ordinary dividend — $0.65 interim — plus $0.70 via a $310m on‑market buyback), with a new policy to return at least 75% of free cash flow (up from 50%) and a revised net‑debt target of up to $1.5bn (H1 net debt was $2m with ~$3.2bn liquidity). First‑half metrics: underlying EBIT $558m (up $249m), reported NPAT $391m, group ROIC 8.1%, H1 CapEx $681m (CapEx expected to peak this year and step down in H1 FY27), $190m of annualized savings delivered from the $200m program and a new $150m cost program due to be at full run‑rate in FY27; growth targets include a $500m EBIT uplift by 2030 (North America >$200m, Australia >$125m, Asia/NZ ~$150m), capacity adds of +300ktpa at North Star and +240ktpa from MCL7, acceleration of realization of ~1,200ha surplus land (33ha sold for $76m) and expected distributions of >$1.3bn to shareholders in 2026.BlueScope Steel Financial Statement Overview
Summary
Overall financials are mixed: a strong balance sheet (low debt-to-equity of 0.08 and high equity ratio of 67.61%) supports stability, but profitability and cash generation are weak (net margin 0.52% and free cash flow growth -59.43%) alongside declining operating margins.Income Statement
BlueScope Steel's income statement shows a mixed performance. The company has experienced a decline in revenue growth over the past year, with a negative growth rate of -4.40%. However, the gross profit margin remains relatively strong at 36.95%, indicating efficient production processes. The net profit margin is low at 0.52%, reflecting challenges in converting revenue into profit. EBIT and EBITDA margins have also decreased, suggesting pressure on operational efficiency.65
Positive
Balance Sheet
The balance sheet of BlueScope Steel is relatively strong, with a low debt-to-equity ratio of 0.08, indicating conservative leverage. The return on equity has decreased to 0.79%, which is a concern for shareholders seeking returns. The equity ratio stands at 67.61%, showing a solid equity base relative to total assets, which enhances financial stability.75
Positive
Cash Flow
Cash flow analysis reveals some weaknesses, with a significant decline in free cash flow growth at -59.43%. The operating cash flow to net income ratio is 16.87%, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 12.70%, suggesting limited cash available for reinvestment or distribution to shareholders.55
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.46B | 16.25B | 17.06B | 18.17B | 18.99B | 12.87B |
| Gross Profit | 2.09B | 6.01B | 6.71B | 2.64B | 4.71B | 2.38B |
| EBITDA | 1.16B | 994.50M | 1.99B | 2.01B | 4.38B | 2.22B |
| Net Income | 288.33M | 83.80M | 805.70M | 1.01B | 2.81B | 1.19B |
Balance Sheet | ||||||
| Total Assets | 15.77B | 15.78B | 15.68B | 15.94B | 16.61B | 13.15B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 857.60M | 1.09B | 1.49B | 1.68B | 1.96B |
| Total Debt | 1.56B | 886.00M | 721.50M | 786.50M | 1.32B | 1.16B |
| Total Liabilities | 4.36B | 4.51B | 4.39B | 4.90B | 6.16B | 4.99B |
| Stockholders Equity | 10.77B | 10.67B | 10.72B | 10.47B | 9.78B | 7.63B |
Cash Flow | ||||||
| Free Cash Flow | 268.16M | 179.50M | 433.70M | 1.34B | 1.71B | 897.80M |
| Operating Cash Flow | 1.62B | 1.41B | 1.41B | 2.15B | 2.47B | 1.66B |
| Investing Cash Flow | -1.21B | -1.23B | -967.00M | -979.10M | -1.76B | -757.40M |
| Financing Cash Flow | -133.44M | -423.70M | -849.20M | -1.36B | -1.05B | -295.90M |
BlueScope Steel Technical Analysis
Positive
100.56
Price Trends
94.15
Positive
82.06
Positive
76.64
Positive
Market Momentum
0.37
Positive
51.79
Neutral
20.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLSFY, the sentiment is Positive. The current price of 100.56 is above the 20-day moving average (MA) of 98.78, above the 50-day MA of 94.15, and above the 200-day MA of 76.64, indicating a neutral trend. The MACD of 0.37 indicates Positive momentum. The RSI at 51.79 is Neutral, neither overbought nor oversold. The STOCH value of 20.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BLSFY.
BlueScope Steel Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $8.60B | 6.76 | 0.73% | 2.06% | -5.62% | -88.83% | |
67 Neutral | $7.94B | 10.04 | 10.51% | 1.02% | -1.61% | -81.36% | |
65 Neutral | $8.19B | 17.63 | 3.49% | 7.02% | -16.69% | 585.38% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $7.05B | -7.69 | 2.47% | 2.92% | -2.53% | -36.08% | |
53 Neutral | $1.99B | -19.29 | -10.50% | ― | -5.79% | -5.30% | |
49 Neutral | $6.32B | -4.42 | -22.96% | ― | -6.76% | -255.94% |
* Basic Materials Sector Average
BLSFY
BlueScope Steel
98.27
27.81
39.47%
CLF
Cleveland-Cliffs
10.83
0.79
7.87%
CMC
Commercial Metals Company
71.22
24.61
52.81%
GGB
Gerdau SA
3.75
0.92
32.65%
SID
Companhia Siderúrgica Nacional
1.55
0.06
4.03%
TX
Ternium SA
41.74
14.20
51.56%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.