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Nucor (NUE) Shares Up 101% YTD: What's Driving the Rally?
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Nucor Corporation’s (NUE - Free Report) shares have surged 101.1% so far this year. The company has also outperformed its industry’s rise of 26.6% over the same time frame. Moreover, it has topped the S&P 500’s 23.9% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Image Source: Zacks Investment Research
What’s Aiding NUE?
Nucor is benefiting from continued strength in the non-residential construction market. It is also seeing healthy demand in the automotive market despite the ongoing semiconductor crunch. The company is also witnessing strength in heavy equipment and improved conditions in energy markets. Higher demand is driving its shipments.
The company is also benefiting from an upswing in steel prices. Its average sales price shot up 86% year over year in the third quarter. Higher domestic steel prices are acting as a catalyst for Nucor’s steel mills unit.
U.S. steel prices have staged a strong recovery and hit record levels this year after plunging to pandemic-led multi-year lows in August 2020. The rebound has been driven by strong end-market demand, tight supply conditions and higher raw material costs.
The company delivered higher profits in the third quarter of 2021, thanks to strong demand and higher steel prices. The third quarter marked the highest quarterly earnings in the steel giant’s history.
Nucor, in its third-quarter call, said that it sees continued strong results in the fourth quarter with earnings potentially exceeding the record-level set in the third quarter. The company expects strong demand across most end-use markets to continue into 2022. Nucor expects improved profitability in the steel mills segment in the fourth quarter on a sequential comparison basis on additional earnings growth at its sheet and plate mills.
Earnings estimates for Nucor have also been going up over the past two months. The Zacks Consensus Estimate for 2021 has increased around 7.7% while the same for fourth-quarter 2021 has gone up 11.5%. The favorable estimate revisions instill investor confidence in the stock.
Nutrien has an expected earnings growth rate of 212.2% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 12.9% upward over the last 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 34% in a year.
AdvanSix has a projected earnings growth rate of 196.9% for the current year. ASIX's consensus estimate for the current year has been revised 6.8% upward over the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 149% in a year.
Intrepid Potash has a projected earnings growth rate of 244.7% for the current year. The consensus estimate for IPI’s current year has been revised 3.3% upward over the last 60 days.
Intrepid Potash beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 132.9%, on average. IPI shares have surged around 203% in a year.
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Nucor (NUE) Shares Up 101% YTD: What's Driving the Rally?
Nucor Corporation’s (NUE - Free Report) shares have surged 101.1% so far this year. The company has also outperformed its industry’s rise of 26.6% over the same time frame. Moreover, it has topped the S&P 500’s 23.9% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
What’s Aiding NUE?
Nucor is benefiting from continued strength in the non-residential construction market. It is also seeing healthy demand in the automotive market despite the ongoing semiconductor crunch. The company is also witnessing strength in heavy equipment and improved conditions in energy markets. Higher demand is driving its shipments.
The company is also benefiting from an upswing in steel prices. Its average sales price shot up 86% year over year in the third quarter. Higher domestic steel prices are acting as a catalyst for Nucor’s steel mills unit.
U.S. steel prices have staged a strong recovery and hit record levels this year after plunging to pandemic-led multi-year lows in August 2020. The rebound has been driven by strong end-market demand, tight supply conditions and higher raw material costs.
The company delivered higher profits in the third quarter of 2021, thanks to strong demand and higher steel prices. The third quarter marked the highest quarterly earnings in the steel giant’s history.
Nucor, in its third-quarter call, said that it sees continued strong results in the fourth quarter with earnings potentially exceeding the record-level set in the third quarter. The company expects strong demand across most end-use markets to continue into 2022. Nucor expects improved profitability in the steel mills segment in the fourth quarter on a sequential comparison basis on additional earnings growth at its sheet and plate mills.
Earnings estimates for Nucor have also been going up over the past two months. The Zacks Consensus Estimate for 2021 has increased around 7.7% while the same for fourth-quarter 2021 has gone up 11.5%. The favorable estimate revisions instill investor confidence in the stock.
Nucor Corporation Price and Consensus
Nucor Corporation price-consensus-chart | Nucor Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Intrepid Potash, Inc. (IPI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 212.2% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 12.9% upward over the last 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 34% in a year.
AdvanSix has a projected earnings growth rate of 196.9% for the current year. ASIX's consensus estimate for the current year has been revised 6.8% upward over the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 149% in a year.
Intrepid Potash has a projected earnings growth rate of 244.7% for the current year. The consensus estimate for IPI’s current year has been revised 3.3% upward over the last 60 days.
Intrepid Potash beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 132.9%, on average. IPI shares have surged around 203% in a year.