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Nucor or Steel Dynamics: Which Stock Do Analysts Prefer?

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Jan. 17 2019, Published 11:25 a.m. ET

Nucor

Steel Dynamics (STLD) is scheduled to release its fourth-quarter earnings on January 22. Nucor (NUE), the largest US-based steel producer, is scheduled to release its earnings on January 29. Nucor received a “buy” or higher rating from 81% of the analysts, while the remaining analysts polled by Thomson Reuters on January 16 rated it as a “hold” or some equivalent. Nucor’s mean consensus target price of $70.49 represents a 23.9% upside over its closing prices on January 16.

Looking at Steel Dynamics, the stock received a “buy” or higher rating from 73% of the analysts, while the remaining analysts polled by Thomson Reuters on January 16 rated it as a “hold.” Steel Dynamics is trading 30.7% below its mean consensus target price of $43.58.

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Fourth-quarter estimates

Nucor is expected to report a 23.8% YoY (year-over-year) rise in its fourth-quarter revenues. The company’s adjusted EBITDA is expected to double during this period. Analysts expect Steel Dynamics to post a 25.9% YoY rise in its fourth-quarter revenues. The company’s adjusted EBITDA is expected to rise 67.2% YoY during the quarter.

Nucor and Steel Dynamics are expected to post record earnings in 2018. Both of the companies are investing significantly to expand their capacity. They announced share buybacks last year. However, nothing seems to please investors. Both of the stocks saw selling pressure last year. U.S. Steel Corporation (X) and Cleveland-Cliffs (CLF) also announced share buybacks last year as cash flows improved amid higher steel prices.

Next, we’ll discuss how analysts rate AK Steel (AKS).

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