AK Steel (AKS) has been among the weakest steel stocks this year. As of April 6, the stock had lost 22.8% in 2018. In comparison, ArcelorMittal (MT) and Nucor (NUE) had lost 3.8% and 4.1%, respectively, and Steel Dynamics (STLD) was almost flat. In this article, we’ll see how analysts are rating AK Steel.
Of the analysts covering AK Steel on April 6, five recommended “buy” or an equivalent, eight recommended “hold,” and one recommended “sell.” Notably, AK Steel has the highest percentage of “hold” ratings among the steel stocks we’re covering in this series.
AK Steel has received a mean consensus price target of $6.19, which represents a 41.6% upside based on its April 6 closing price, the highest potential among our select group of steel stocks. However, investment decisions should not be based merely on this metric.
AK Steel sells a large percentage of its steel on a contract basis and has already contracted many of its 2018 shipments. Some annual contracts were rolled over before the spike in spot steel prices we saw in 1Q18, meaning that AK Steel may not be able to reap the full advantage of the recent uptrend in spot steel prices, at least in 1Q18. Furthermore, some of the biggest gains in steel prices have come in the hot rolled space, where AK Steel has minimal exposure. In the next article, we’ll see how analysts have rated U.S. Steel Corporation (X).
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