Analysts Still Hate Steel Stocks despite Bumper Earnings

Overall, it has been a mixed earnings season for steel companies.

Mohit Oberoi, CFA - Author

Jan. 26 2021, Updated 11:10 p.m. ET

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Steel stocks

The fourth-quarter earnings season is nearly over for steel companies and most companies have released their quarterly earnings. Overall, it has been a mixed earnings season for steel companies. Steel Dynamics (STLD) was the first major steel company to release its quarterly earnings. The company missed its revenue estimates, but its earnings were better than expected. Steel Dynamics’ earnings rose to a record high last year.

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AK Steel

AK Steel (AKS) posted its fourth-quarter earnings on January 28 and posted better-than-expected earnings but missed revenue estimates. Read AK Steel’s 2019 Guidance: What You Need to Know for a detailed analysis of AK Steel’s fourth-quarter earnings. Nucor (NUE) posted its earnings on January 29, beating analyst estimates for both the top line as well as the bottom line. Like Steel Dynamics, Nucor also posted record earnings last year.

U.S. Steel (X) posted its fourth-quarter earnings on January 30 after markets closed. It missed both top-line and bottom-line estimates. U.S. Steel’s first-quarter guidance was also far below analysts’ estimates. Although the stock fell sharply in after-hours trading on January 30, it closed with gains on January 31.

Series overview

Generally, analysts reassess their recommendations following a company’s earnings release. In this series, we’ll do a brief overview of steel companies’ fourth-quarter earnings. We’ll also see how leading brokerages changed their view of steel stocks (SPY) after their earnings release.

Let’s begin by looking at Steel Dynamics’ ratings and target price in the next article.


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