Deutsche Bank analyst Chris Terry downgraded Nucor to Sell from Hold with a price target of $45, down from $54. While Nucor on its Q4 earnings call provided supportive commentary for 2020 on end markets, the key new item was capital expenditures in 2020 and 2021, Terry tells investors in a research note. In aggregate, the capex is ~$1B higher than the analyst's numbers over the two-year timeframe. The company's free cash flow is negative $67M in 2020 and with its minimum/progressive dividend of $486M expected in 2020, Nucor will have to fund the dividend out of the cash balance and/or possibly debt, Terry contends. He expects pressure on the share price as the market adjusts to lower cash flow.

BMO Capital lowered the firm's price target on Nucor to $200 from $210 and keeps a Market Perform rating on the shares after its Q1 earnings miss. Following nine consecutive quarters of beating expectations, Nucor's results and outlook disappointed, while its Q2 results are also expected to moderate sequentially, the analyst tells investors in a research note. Nucor remains well-positioned to benefit from positive longer-term demand tailwinds, but its capex spending elevated, BMO adds.