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U.S. Steel Corporation: Has the Storm Settled Down?



U.S. Steel Corporation

U.S. Steel Corporation (X) released its 1Q18 earnings on April 26 after the markets closed. Although the company managed to post better-than-expected earnings during the quarter, it saw a selling spree after its 1Q18 earnings release. The stock made an intraday low of $31.87 on April 27 before settling at $32.37—a 14.1% loss compared to the previous day. U.S. Steel Corporation continued to witness wild price swings last week.

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U.S. Steel Corporation investors are used to volatility. U.S. Steel Corporation is a high beta stock like AK Steel (AKS). In general, the stock is more volatile compared to the broader equity markets. In contrast, new age mini-mills (XME) like Nucor (NUE) and Steel Dynamics (STLD) witness less volatility.

For U.S. Steel Corporation’s investors, the company’s 1Q18 earnings offer a sense of déjà vu. The stock saw massive selling after its 1Q17 earnings spooked markets last year. Not only did the company miss its earnings estimates that quarter, it downwardly revised its annual guidance. The guidance cut, in a rising steel price environment, didn’t go down well with investors. U.S. Steel Corporation fell 26% after its 1Q17 earnings release—its worst single-day fall. The company’s CEO Mario Longhi retired a few days after the stock’s massive fall.

In this series

In this series, we’ll discuss two aspects. First, we’ll see what really spooked investors in U.S. Steel Corporation’s 1Q18 earnings release. Second, we’ll discuss what lies ahead for the battered stock in 2018 and beyond.

Next, we’ll discuss how analysts changed their ratings on U.S. Steel Corporation after its 1Q18 earnings release.


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