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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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) .
Long-Term Buys You Won't See in the News
The stocks you see in today's headlines may not be in the news tomorrow or next week. If you're looking for profitable long-term investments, you may be interested to see what Zacks Research is recommending to our private members. These moves have double and triple-digit profit potential. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this exclusive information? Click here>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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