Analysts’ Views: Can U.S. Steel Continue to Rise?



Analysts’ views

U.S. Steel Corporation (X) was among the best performing steel stocks (DIA) (DOW) last year with gains of 313%. The stock has continued its good run in 2017 and is trading with year-to-date gains of 8.2%. In contrast, AK Steel (AKS) and Steel Dynamics (STLD) have seen negative price action this year after last year’s stellar run. In this part, we’ll see how analysts rate U.S. Steel stock after its sharp rally.

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Analysts’ rating

According to consensus estimates compiled by Thomson Reuters, U.S. Steel Corporation has a mean one-year price target of $37.17—4.0% upside over its closing price on March 14, 2017. Of the 15 analysts surveyed by Thomson Reuters, seven recommended U.S. Steel stock as a “buy” or some equivalent, while two recommended a “sell” or some equivalent on the stock. Almost 40% of the analysts recommended a “hold” on the stock.

Some Wall Street analysts raised U.S. Steel’s target price after the company’s 4Q16 earnings release. For example, J.P. Morgan raised U.S. Steel’s one-year price target from $37 to $39. Bank of America also raised its rating on U.S. Steel from “neutral” to “buy.”

What to expect

US steel prices have gained pace after losing some ground in February. Falling seaborne coal prices would also bode well for U.S. Steel’s Europe operations. Reports suggest that China plans to cut its steel capacity by 50 million metric tons this year. Notably, Chinese steel exports fell to a three-year low in February. China’s capacity cuts and falling exports would benefit steelmakers globally including U.S. Steel.

In the next part, we’ll see how analysts rate ArcelorMittal (MT).


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