How Wall Street Sees Steel Stocks ahead of 4Q17
The US steel industry is having a tepid 2017. As the initial euphoria over President Trump’s trillion-dollar infrastructure plans and tougher trade laws died down, so did investors’ optimism for steel stocks. To be sure, steel stocks were among the front runners in the “Trump trade,” and we saw a sharp rally in steel stocks last year.
However, 2017 has been a different ball game for steel stocks (XME). While ArcelorMittal (MT) is still trading with year-to-date (or YTD) gains of 25.8%, U.S. Steel (X) and Nucor (NUE) are trading with YTD losses. AK Steel (AKS), which was among the best-performing steel stocks last year, has lost 43.6% so far in 2017 based on September 12’s closing prices. See Can AK Steel Recoup Its 2017 Losses? to find out what could drive AK Steel in the coming months.
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Steel market conditions have been quite stable over the last couple of months. At the beginning of the year, the consensus view was that we could see some moderation in US steel prices in the second half of the year. However, US steel producers are pushing for price hikes even as we approach the seasonally weak fourth quarter.
Analysts’ action was quite muted since the 2Q17 earnings season. However, recently we’ve seen some analysts revise their ratings for steel stocks. In this series, we’ll see how analysts are rating leading steel producers.
Let’s begin by looking at AK Steel’s ratings and consensus price target.