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Nucor (NUE) to Buy Summit Utility Structures and Sovereign Steel

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Nucor Corporation (NUE - Free Report) inked an agreement to acquire Summit Utility Structures LLC and a related company, Sovereign Steel Manufacturing LLC. These are manufacturers of metal poles and other steel structures for utility infrastructure and highway signage.

These companies will be part of a new business unit, Nucor Towers & Structures, serving the utility, transportation and telecommunication sectors. The acquired companies are preferably suited to serve the markets in the Northeast part of the United States. Still the company plans to set up a countrywide footprint capable of servicing all customers throughout North America.

The market for utility infrastructure has been stable and projected to enter a phase of fast growth owing to the substitution of aging infrastructure, growth and migration of population, a focus on increasing electric grid reliability and higher penetration of renewable energy and energy storage.

The shift to 5G and the higher wireless data consumption support strong market trends for telecommunication towers. The highway signage market is also continuing to witness strength and is anticipated to gain as departments of transportation begin to apply the recently-signed federal infrastructure bill.

Shares of Nucor have gained 24.4% in the past year against a 2.7% decline of the industry.

Zacks Investment Research
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In its last earnings call, the company stated that demand remains strong for steel and steel products in its end-use markets and expects 2022 will be another year of strong earnings and cash flow.

Nucor envisions second-quarter 2022 as the most profitable quarter in its history, surpassing the earlier record set in the fourth quarter of 2021. Earnings are projected to be driven by higher profitability in the steel products segment on the back of strong demand in non-residential construction markets.

The company also expects earnings in the steel mills segment to strengthen in the second quarter due to higher profitability at its sheet and plate mills. The raw materials segment is also forecast to deliver higher profits, driven by relatively higher selling prices for raw materials.

Nucor Corporation Price and Consensus

 

Nucor Corporation Price and Consensus

Nucor Corporation price-consensus-chart | Nucor Corporation Quote

 

Zacks Rank & Other Key Picks

Nucor currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Nutrien Ltd. (NTR - Free Report) and Cabot Corporation (CBT - Free Report) .

Allegheny has a projected earnings growth rate of 953.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 31.7% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 15.7% in a year and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien has a projected earnings growth rate of 163.2% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 27.5% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 37.7% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 5.2% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 23.5% over a year.