The Bluescope Steel Ltd (ASX: BSL) share price is trading in the green on Wednesday morning. At the time of writing the ASX 200 company's shares are 1.9% higher at $22.52 a piece. This morning increase means the share price is now 7.8% higher over the month and 6.7% higher over the year.
The latest uptick follows the company's annual general meeting (AGM) and 1H FY26 earnings update yesterday morning. The ASX 200 steelmaker confirmed that its 1H FY26 underlying EBIT is now expected at the bottom end of its previously announced $550 million to $620 million range.
Looking ahead, BlueScope said it is prioritising near-term cost and productivity improvements. It also has strategic initiatives to deliver an added $500 million in annual earnings by 2030. The business plans to unlock value from its significant surplus land holdings. Management is confident in the company's resilience.
Following the latest announcement, analysts at Macquarie have updated its guidance on Bluescope Steel's shares.
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Macquarie's latest outlook for the ASX 200 steelmaker
In a note to investors this morning, the broker has confirmed its outperform rating on Bluescope Steel. It has also raised its 12-month target price to $25.50, up from $25.35 a month ago.
At the time of writing that represents a potential 13.2% upside for investors.
"Valuation: We adjust our SOTP-based TP to $25.50ps (from $25.35ps), driven by earnings adjustments," Macquarie said in its note.
Improving Australian demand conditions and support for US price outcomes remain key to the thesis. Management continues to execute well, and the business looks well positioned, as it drives further cost out and makes growth investments.
Earnings changes: We have adjusted FY26/27/28E EPS by +0.4%/+0.0%/ +0.0%, factoring in slightly stronger conditions in ASP, offset by weaker conditions in NZ.
What else did the broker have to say about Bluescope Steel?
Macquarie analysts noted that Bluescope Steel's 1HFY26 trading update sees EBIT at the low end of the prior guidance range of $550-620m. Its analysts currently expect $555 million (up from $551 million prior).
Judging from sub-segmental commentary, most businesses are tracking to the group's prior expectations. Ahead of the start of the EAF in NZ, results appear slightly weaker than we expected. Conversely, in Australia, demand conditions are improving, leading to outcomes marginally ahead of what we discounted. Cost pressures have been neutralised by a one-off GST tax credit, which does suggest minor impacts on the cost outlook relative to expectations.
Meanwhile, in the US, steel prices have supported spread improvement. The broker added that industry commentary has remained broadly supportive of further momentum, as trade conditions tighten and tariffs slow imports.
"Steelscape seems a weak spot, likely a consequence of weaker prices early in 1HFY26, which should reverse," the broker said in its note.
