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Steel Dynamics, Inc. (STLD) - free report >>
United States Steel Corporation (X) - free report >>
Nucor Corporation (NUE) - free report >>
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Here's Why AK Steel (AKS) And US Steel (X) Tanked Today
Shares of two prominent steel producers, AK Steel and United States Steel (X - Free Report) , plummeted on Thursday after a key analyst downgrade. AK Steel was down more than 10.4% in early afternoon trading, while US Steel dropped more than 6.3%.
Both of these companies were hampered by a downgrade from Credit Suisse. Analyst Curt Woodworth lowered his rating to “neutral” from “outperform” for both stocks and warned that the Trump boost to U.S. steel producers may be overdone.
U.S. steel stocks have had a hot start to the New Year thanks to a perceived benefit from in the incoming administration. President-elect Donald Trump has repeatedly promised to renew American manufacturing and infrastructure and performed well in areas with steel-based economies.
Woodworth noted that there was a sharp decline in bulk materials towards the latter half of 2016 and suggested that U.S. producers were “unlikely to materially benefit” from an infrastructure stimulus. As the analyst points out, U.S. steel stocks tend to move based on supply-side support and Asian cost-push inflation.
Woodworth also lowered his rating for Steel Dynamics (STLD - Free Report) ; shares of that company were down about 3.1% in mid-afternoon trading Thursday.
Despite these downgrades, Woodworth maintains “neutral” ratings for Nucor (NUE - Free Report) and Commercial Metals (CMC - Free Report) . He also currently holds an “underperform” rating on Cliffs Natural Resources (CLF - Free Report) .
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