Among the stocks we are covering, Steel Dynamics (STLD) has received the highest percentage of “buy” or equivalent recommendations from analysts at 70%. According to the consensus estimates compiled by Bloomberg, Steel Dynamics carries a one-year price target of $30.71, which represents a 24.7% upside over August 31 closing prices.
The graph above shows recent Wall Street analyst recommendations for Steel Dynamics. On August 23, Clarksons Platou Securities maintained its “neutral” rating on the company with a one-year price target of $25. Berenberg is among the most bullish brokerages on Steel Dynamics and has set a one-year price target of $35. This represents a 42% upside over current price levels.
Let’s now see why most analysts seem to be bullish (SSO) on Steel Dynamics.
Steel Dynamics has one of the most diversified end-market exposures compared to other steel companies. For example, AK Steel (AKS) gets more than half of its revenues from the automotive sector, while Nucor (NUE) relies heavily on non-residential construction demand. Diversified end-market exposure reduces a company’s risk profile, as the weakness in one customer segment doesn’t have a big impact on earnings.
Last year, U.S. Steel’s (X) performance was hit by the weakness in the energy market. However, this year, U.S. Steel’s flat rolled segment has more than made up for the weakness in the energy market. You can read Why the Best of U.S. Steel’s Flat Rolled Segment Is Yet to Come to explore this more.
Strong balance sheet
Steel Dynamics has a healthy balance sheet. The company’s financial strength should help it survive the current steel industry slowdown. It should do better than the more financially levered companies such as U.S. Steel and AK Steel if steel market conditions worsen in the coming months.
We’ve already seen steel industry indicators deteriorate in July and August. You can read What Will Santa Bring for US Steel Producers This Christmas? to learn more about this.
In fiscal 2Q16, Activision's revenues from Blizzard rose by 92% YoY to $738 million. The launch of Blizzard's Overwatch franchise drove user engagement.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.