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How Wall Street Sees Steel Stocks ahead of 4Q17

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Part 8
How Wall Street Sees Steel Stocks ahead of 4Q17 PART 8 OF 8

How Wall Street Is Rating Steel Dynamics this Month

Analysts

In the previous part of this series, we saw how Wall Street analysts are rating Nucor (NUE). In this final article, we’ll see how analysts rate Steel Dynamics (STLD) this month. Steel Dynamics has been a relative outperformer this year. While some of the other US-based steel companies (XME), including U.S. Steel (X) and AK Steel (AKS), have lost significantly this year, Steel Dynamics is trading with year-to-date losses of 6.9% based on September 12 closing prices.

How Wall Street Is Rating Steel Dynamics this Month

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Like Nucor, Steel Dynamics also has comfortable leverage ratios. However, the stock has historically traded at a discount to Nucor. You can read Nucor versus Steel Dynamics: Which Is More Expensive? to find out more about Steel Dynamics’ valuation.

Steel Dynamics has received a “strong buy” rating from three analysts while seven analysts rate the stock a “buy.” The remaining four analysts rate Steel Dynamics a “hold.” Steel Dynamics has received a consensus price target of $41.92 from the 14 analysts polled by Thomson Reuters on September 12, which represents a 26.0% upside.

2Q17 performance

Steel Dynamics reported revenues of $2.39 billion in 2Q17 versus $2.36 billion in 1Q17 and $2.0 billion in 2Q16. While Steel Dynamics’ 2Q17 revenues rose on a sequential basis, its profitability fell during this period. It generated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $339 million in 2Q17—compared to $408 million in 1Q17. See How U.S. Steel’s 2Q17 Performance Stacks Up against Its Peers for a comparative analysis of steel companies’ 2Q17 earnings.

You can also visit our Steel page for ongoing updates on this industry.

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