Analysts Take a Fresh Look at US Steel Stocks after 3Q17
US steel stocks
All leading US-based steel companies (SPY) (SPX) have released their 3Q17 earnings. While U.S. Steel Corporation (X) and Nucor (NUE) posted better-than-expected earnings, AK Steel’s (AKS) 3Q17 earnings fell short of analysts’ estimates. Analysts typically reassess their recommendations after a company’s earnings release. In this series, we’ll discuss how analysts are rating leading US-based steel producers after their 3Q17 earnings. We’ll start by looking at Steel Dynamics’ (STLD) ratings and target price.
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Steel Dynamics released its 3Q17 earnings on October 18 and posted revenues of $2.44 billion during the quarter—compared to $2.1 billion in 3Q16 and $2.39 billion in 2Q17. The company reported an adjusted EPS (earnings per share) of $0.66 in 3Q17—compared to $0.64 in 3Q16 and $0.63 in 2Q17.
According to consensus estimates compiled by Thomson Reuters, Steel Dynamics has a mean one-year target price of $41.73, which represents 10.5% upside compared its closing price on November 8. In contrast, the stock carried a target price of $40.14 on October 17—one day before its earnings release. Steel Dynamics received a “strong buy” rating from three analysts, while six analysts rated the stock as a “buy.” The remaining four analysts rated the stock as a “hold.”
KeyBanc upgraded Steel Dynamics from “sector weight” to “overweight” after its 3Q17 earnings. Citi raised Steel Dynamics’ target price from $41 to $42. Cowen and Company raised the stock’s target price from $39 to $43. Morgan Stanley also raised Steel Dynamics’ target price from $33 to $36 on October 24.
In the next part, we’ll see how analysts are rating Nucor after its 3Q17 earnings.