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Steel Dynamics (STLD) Rises Yet Lags Behind Market: Some Facts Worth Knowing

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Steel Dynamics (STLD - Free Report) closed at $119.75 in the latest trading session, marking a +0.52% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.59%. On the other hand, the Dow registered a gain of 0.82%, and the technology-centric Nasdaq increased by 0.55%.

The steel producer and metals recycler's shares have seen an increase of 6.8% over the last month, not keeping up with the Basic Materials sector's gain of 7.82% and the S&P 500's gain of 9.16%.

Analysts and investors alike will be keeping a close eye on the performance of Steel Dynamics in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $2.44, marking a 44.16% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.03 billion, down 16.43% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.40 per share and revenue of $18.6 billion. These totals would mark changes of -36.51% and -16.47%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Steel Dynamics. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. Right now, Steel Dynamics possesses a Zacks Rank of #3 (Hold).

Investors should also note Steel Dynamics's current valuation metrics, including its Forward P/E ratio of 8.27. Its industry sports an average Forward P/E of 8.6, so one might conclude that Steel Dynamics is trading at a discount comparatively.

The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 143, which puts it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow STLD in the coming trading sessions, be sure to utilize Zacks.com.


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