Did Steel Dynamics’s 4Q16 Earnings Impress Wall Street?
According to consensus estimates compiled by Thomson Reuters, Steel Dynamics (STLD) has a mean one-year price target of $40.60, representing a 20.6% upside over its closing price on January 7, 2017. In contrast, Steel Dynamics carried a one-year price target of $40.27 on January 23, one day before its earnings release.
There have not been many changes in analysts’ recommendations after Steel Dynamics’s 4Q16 earnings release. On January 27, Barclays raised Steel Dynamics’s one-year price target from $37 to $40 while maintaining its “overweight” rating. There have been no other major changes after Steel Dynamics’s 4Q16 earnings release.
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Favorite steel play
Steel Dynamics (STLD) seems to be Wall Street’s favorite steel play (XME), and the stock hasn’t received any “sell” recommendations. Of the 16 analysts surveyed by Thomson Reuters, 12 rated the stock a “buy” or equivalent, and the remaining four analysts rated it a “hold.”
Looking at other steel companies, 38% of analysts rate U.S. Steel (X) a “buy” or equivalent, while 17% rate it a “sell” or equivalent. The stock received “hold” recommendations from 45% of analysts polled by Thomson Reuters. AK Steel (AKS) has received the most “hold” recommendations in our coverage of steel stocks.
Steel Dynamics (STLD) reported revenues of ~$1.9 billion in 4Q16 compared to $2.1 billion in 3Q16 and ~$1.6 billion in 4Q15. The sequential decline was expected, given the seasonally lower US steel demand in the fourth quarter.
Steel Dynamics reported adjusted EBITDA1 of $267 million in 4Q16 versus $358 million in 3Q16 and $120 million in 4Q15.
In the next article, we’ll look at analysts’ recommendations and target prices for Nucor (NUE).
- earnings before interest, taxes, depreciation, and amortization ↩