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Steel Dynamics (STLD) Gains But Lags Market: What You Should Know

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Steel Dynamics (STLD - Free Report) closed at $84.98 in the latest trading session, marking a +1.2% move from the prior day. This change lagged the S&P 500's 1.84% gain on the day. At the same time, the Dow added 1.33%, and the tech-heavy Nasdaq gained 0.53%.

Coming into today, shares of the steel producer and metals recycler had lost 6.19% in the past month. In that same time, the Basic Materials sector gained 0.94%, while the S&P 500 lost 0.5%.

Wall Street will be looking for positivity from Steel Dynamics as it approaches its next earnings report date. The company is expected to report EPS of $5.64, up 65.88% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.62 billion, up 25.77% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $21.52 per share and revenue of $21.63 billion. These totals would mark changes of +33.75% and +17.49%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Steel Dynamics. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 12.82% higher. Steel Dynamics is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Steel Dynamics's current valuation metrics, including its Forward P/E ratio of 3.9. This valuation marks a premium compared to its industry's average Forward P/E of 3.49.

The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 22, which puts it in the top 9% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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