Analyzing Steel Dynamics’ Third-Quarter Earnings

Steel Dynamics (STLD) released its third-quarter earnings on October 17 and held its earnings call the next day. The company reported revenues of $3.22 billion in the third quarter—compared to $3.09 billion in the second quarter and $2.44 billion in the third quarter of 2017. The company generated an EPS of $1.69 in the third quarter. The company posted an EPS of $1.53 in the second quarter and $0.64 in the third quarter of 2017. Steel Dynamics posted a record adjusted EBITDA and operating income during the third quarter. We’ll discuss how analysts have changed Steel Dynamics’ ratings after its earnings release.

BMO lowered Steel Dynamics’ target price from $60 to $53 after its earnings release. Steel Dynamics carries a mean consensus target price of $52.14, which represents a 26.5% upside over its closing prices on November 6. In contrast, Steel Dynamics carried a one-year target price of $53.57 on October 16—one day before its earnings release.

Steel Dynamics has received a “strong buy” rating from three analysts, while seven analysts have rated it as a “buy” or some equivalent. The remaining four analysts polled by Thomson Reuters on November 6 gave Steel Dynamics a “hold” rating.

Steel Dynamics announced a share buyback in October. In the first nine months of the year, Steel Dynamics has repurchased $193 million of its shares. Nucor (NUE) and U.S. Steel Corporation (X) also have share buyback programs in place. Despite the surge in earnings and buybacks, steel stocks (XME) have fallen in 2018.

Next, we’ll discuss how analysts rate AK Steel (AKS) after its third-quarter earnings release.