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U.S. Steel Corporation Delivered Strong 3Q17 Earnings

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3Q17 earnings

U.S. Steel Corporation (X) released its 3Q17 earnings on October 31. The company generated revenues of $3.3 billion in 3Q17—compared to $3.1 billion in 2Q17 and $2.9 billion in 3Q16. U.S. Steel Corporation posted an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $342 million in 3Q17. It posted an adjusted EBITDA of $362 million in 2Q17 and $272 million in 3Q16. Steel Dynamics (STLD), Nucor (NUE), and AK Steel (AKS) also posted sequentially lower EBITDA in 3Q17. U.S. Steel Corporation’s 3Q17 revenues and profits beat analysts’ estimates.

Recommendations

According to the consensus estimates compiled by Thomson Reuters, U.S. Steel Corporation has a mean one-year target price of $31, which represents 13.7% upside over its closing price on November 8. In contrast, U.S. Steel Corporation carried a one-year target price of $28.36 on October 30—one day before its earnings release. U.S. Steel received a “strong buy” rating from three analysts, while five analysts rated the stock as a “buy.” Five analysts polled by Thomson Reuters on November 8 rated the stock as a “hold.” Two analysts rated U.S. Steel Corporation as a “sell.”

Cowen and Company upgraded U.S. Steel Corporation from “underperform” to “market perform” and raised its target price from $20 to $28 after its 3Q17 earnings. BMO also raised U.S. Steel Corporation’s target price from $29 to $33. However, JPMorgan Chase lowered U.S. Steel Corporation’s target price from $51 to $48.

Guidance

While U.S. Steel Corporation’s 3Q17 earnings beat helped buoy sentiments (CLF), its better-than-expected guidance also provided fodder to bulls and the stock rose 7.8% on November 1. During its 3Q17 earnings presentation, U.S. Steel Corporation raised its 2017 net income guidance to $323 million from the previous guidance of $300 million.

Read A Deeper Dive into U.S. Steel’s 3Q17 Financial Performance for a detailed analysis of U.S. Steel Corporation’s 3Q17 earnings.

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