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Nucor's (NUE) Shares Scale Fresh 52-Week High at $56.63
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Shares of Nucor Corporation (NUE - Free Report) touched a new 52-week high of $56.63 yesterday, before retracing a bit to close the day at $56.34. The steel giant has delivered a healthy year-to-date return of roughly 42%. Average volume of shares traded over the last three months is roughly 2,785.3K.
What's Driving NUE?
Nucor, last month, issued upbeat guidance for second-quarter 2016. The company expects earnings for the quarter to be in the band of 65 cents to 70 cents per share, an increase from 39 cents a share it earned a year ago and 22 cents per share recorded in the previous quarter.
The company expects improved performance in its Steel Mills division in the second quarter vis-à-vis the first quarter on increased prices and higher volumes. It also expects better performance in its Downstream Products unit in the second quarter compared to the first on improvement in non-residential construction markets. For the Raw Materials segment, the company expects improved profitability in the second quarter on higher pricing in its scrap processing businesses and direct reduced iron (“DRI”) facilities.
Steel market conditions in the U.S. have improved lately, thanks to favorable rulings (leading to levy of tariffs on imports) on steel trade cases in the recent past. The company is expected to benefit from the favorable impact of reduced steel imports as a result of these punitive actions.
Nucor continues to see strength in the automotive market. Demand from this key end-market (especially for the company’s sheet steel products) remains healthy, reflected by contract awards by automotive OEM customers. Nucor's volumes in the automotive market climbed roughly 20% sequentially in first-quarter 2016. The company remains focused on achieving greater penetration of this major market in 2016.
Nucor also remains committed to expand its higher margin product portfolios and improve its cost structure. Moreover, the acquisition of Gallatin Steel Company has reinforced Nucor’s foothold in the key Midwest market (the biggest flat-rolled consuming region in the U.S) and allowed it to better serve its flat-rolled customers in the growing pipe and tube segment.
In addition, sheet piling production capabilities expanded at Nucor-Yamato structural steel following the completion of a roughly $115 million expansion project. The Nucor-Yamato joint venture is expected to continue to grow its share in the steel pilings market over the next few years. The joint venture remains focused on broadening its value-added offerings.
Other well-placed companies in the steel space include ArcelorMittal (MT - Free Report) , Schnitzer Steel Industries, Inc. and United States Steel Corp. (X - Free Report) . While both ArcelorMittal and Schnitzer Steel sport a Zacks Rank #1 (Strong Buy), United States Steel carries a Zacks Rank #2.
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Nucor's (NUE) Shares Scale Fresh 52-Week High at $56.63
Shares of Nucor Corporation (NUE - Free Report) touched a new 52-week high of $56.63 yesterday, before retracing a bit to close the day at $56.34. The steel giant has delivered a healthy year-to-date return of roughly 42%. Average volume of shares traded over the last three months is roughly 2,785.3K.
What's Driving NUE?
Nucor, last month, issued upbeat guidance for second-quarter 2016. The company expects earnings for the quarter to be in the band of 65 cents to 70 cents per share, an increase from 39 cents a share it earned a year ago and 22 cents per share recorded in the previous quarter.
The company expects improved performance in its Steel Mills division in the second quarter vis-à-vis the first quarter on increased prices and higher volumes. It also expects better performance in its Downstream Products unit in the second quarter compared to the first on improvement in non-residential construction markets. For the Raw Materials segment, the company expects improved profitability in the second quarter on higher pricing in its scrap processing businesses and direct reduced iron (“DRI”) facilities.
Steel market conditions in the U.S. have improved lately, thanks to favorable rulings (leading to levy of tariffs on imports) on steel trade cases in the recent past. The company is expected to benefit from the favorable impact of reduced steel imports as a result of these punitive actions.
Nucor continues to see strength in the automotive market. Demand from this key end-market (especially for the company’s sheet steel products) remains healthy, reflected by contract awards by automotive OEM customers. Nucor's volumes in the automotive market climbed roughly 20% sequentially in first-quarter 2016. The company remains focused on achieving greater penetration of this major market in 2016.
Nucor also remains committed to expand its higher margin product portfolios and improve its cost structure. Moreover, the acquisition of Gallatin Steel Company has reinforced Nucor’s foothold in the key Midwest market (the biggest flat-rolled consuming region in the U.S) and allowed it to better serve its flat-rolled customers in the growing pipe and tube segment.
In addition, sheet piling production capabilities expanded at Nucor-Yamato structural steel following the completion of a roughly $115 million expansion project. The Nucor-Yamato joint venture is expected to continue to grow its share in the steel pilings market over the next few years. The joint venture remains focused on broadening its value-added offerings.
Nucor currently carries a Zacks Rank #2 (Buy).
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Other Stocks to Consider
Other well-placed companies in the steel space include ArcelorMittal (MT - Free Report) , Schnitzer Steel Industries, Inc. and United States Steel Corp. (X - Free Report) . While both ArcelorMittal and Schnitzer Steel sport a Zacks Rank #1 (Strong Buy), United States Steel carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>