How Wall Street Sees Steel Dynamics This Earnings Season



Earnings season

Steel Dynamics (STLD) is scheduled to release its 1Q18 earnings on April 18, after markets close. Of the analysts covering the stock on April 6, three recommended “strong buy,” eight recommended “buy” or some equivalent, and three recommended “hold.” Steel Dynamics’ mean price target is $53.50, representing a 23.0% upside based on its April 6 price.

Last month, Deutsche Bank raised Steel Dynamics’ target price from $52 to $53. The brokerage also raised its target price on other steel stocks, including U.S. Steel Corporation (X).

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Earnings in 1Q18

Steel Dynamics expects to post EPS (earnings per share) of $0.88–$0.92 in 1Q18. The company posted EPS of $1.28 in 4Q17 and $0.82 in 1Q17. Steel Dynamics’ earnings are expected to fall sequentially, mostly due to the tax bill introduced in 4Q17. Steel Dynamics’ 4Q17 adjusted EPS were $0.54.

Steel Dynamics’ earnings guidance, released in mid-March, fell short of analysts’ estimates. In contrast, Nucor’s (NUE) 1Q18 guidance beat analysts’ estimates. Prior to 1Q18, Nucor’s quarterly earnings guidance disappointed markets for three straight quarters. While Nucor and Steel Dynamics typically provide their quarterly earnings guidance 15 days before a quarter ends, Cleveland-Cliffs (CLF) and AK Steel (AKS) usually give their guidance during their quarterly earnings calls. In the next article, we’ll see how analysts have rated Nucor ahead of its 1Q18 earnings release.

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