On Tuesday the BlueScope Steel Limited (ASX: BSL) share price finished the day 1.5% higher at $16.00, leaving it within touching distance of a multi-year high.
Despite the strong gain it has made over the last 12 months, one leading broker thinks there's still a significant amount of upside left in the tank for the steel producer's shares.
According to a note out UBS, the broker has slapped a buy rating and $18.00 price target on BlueScope Steel's shares ahead of its half-year results release next week.
This price target implies potential upside of 12.5% for its shares over the next 12 months.
UBS is bullish on the steel producer due to the positive outlook for global economic growth. It believes that BlueScope is one of the best-positioned shares on the ASX to benefit from the trend and expects it to deliver earnings per share of $1.39 in FY 2018.
This is well ahead of the general consensus and prices its shares at just 11.5x forward earnings.
However, the broker isn't bullish on all companies in the sector and has placed a sell rating and $13.70 price target on Sims Metal Management Ltd (ASX: SGM) shares.
The Sims Metal Management share price finished the day 4% lower at $16.62 on the back of this news.
