The steel industry has seen a literal change of fortunes over the past couple of months. The year started on a weak note with most steel stocks falling to multiyear lows in the first trading week of the year. It followed weakness in the metals and mining sectors (XME). However, prices recovered after that.
U.S. Steel Corporation (X), AK Steel (AKS), and ArcelorMittal (MT) have been among the biggest gainers in the steel space this year. Nucor (NUE) and Steel Dynamics have also seen decent upward price action as you can see in the above graph.
The current rally in steel stocks is a welcome break for investors who saw their holdings fall since late 2014. The upward momentum in steel stocks has been backed by improving fundamentals. Read How are China and Brexit Affecting Steel Companies in June? to learn more about recent steel industry indicators.
The upward momentum in steel stocks took many analysts by surprise. Meanwhile, after the spectacular rise in steel stocks over the last couple of months, analysts disagree on the sustainability of the rally. In this part of the series, we’ll look at some of the recent recommendation changes by leading brokerages. Then, we’ll explore why analysts’ opinions are so divided on U.S. Steel. Let’s start by looking at analysts’ recommendations for U.S. Steel in the next part of the series.