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Did Wall Street Change Its View of STLD after Its 1Q18 Earnings?

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Wall Street

On May 9, Steel Dynamics (STLD) received a “strong buy” rating from three analysts, while eight analysts gave the stock a “buy” rating. The remaining four analysts polled by Thomson Reuters on May 9 gave the stock a “hold” rating.

Steel Dynamics carries a mean consensus target price of $53.87, which represents a 14.8% upside over its closing price on May 9. In contrast, Steel Dynamics carried a one-year target price of $54.07 on April 17—one day before its earnings release. 

There has been no major analyst action after Steel Dynamics’ 1Q18 earnings release. On the other hand, several analysts lowered their target prices on U.S. Steel Corporation (X) and AK Steel (AKS) after their 1Q18 earnings releases.

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1Q18 earnings

Steel Dynamics (STLD) reported revenues of $2.6 billion in 1Q18 versus $2.3 billion in 4Q17 and $2.4 billion in 1Q17. The company generated adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] of $400.0 million in 1Q18, compared to $285.0 million in 4Q17 and $421.0 million in 1Q17. Steel Dynamics’ 1Q18 earnings were higher than its guidance and also topped analysts’ estimates.

Steel Dynamics posted positive free cash flows in 1Q18 while Nucor (NUE) posted negative free cash flows in the quarter. ArcelorMittal (MT), which is expected to release its 1Q18 earnings on May 11, is also expected to report negative free cash flows in the quarter.

In the next article, we’ll see how analysts rated Nucor after its 1Q18 earnings release.

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