|Over a week ago|
Week in review: How Trump's policies moved stocks » 08:2006/2706/27/20
FB, UL, VZ, PG, TWTR, CSCO, ERIC, NOK, MU, WDC, ACIA, LITE, IIVI, AKS, MT, NUE, STLD, TMST, X
Catch up on the top…
U.S. Supreme Court declines to hear appeal to steel tariffs, Reuters reports » 09:5206/2206/22/20
AKS, MT, NUE, STLD, X, TMST
The U.S. Supreme Court…
The U.S. Supreme Court rejected a challenge from the American Institute for International Steel to President Trump's tariffs on imported steel, which contended that a key part of the law under which he implemented the duties violates the Constitution, Reuters' Lawrence Hurley reports, citing the court. Trump imposed 25% tariffs on imported steel and 10% tariffs on imported aluminum in March 2018 citing national security. Publicly traded companies in the space include AK Steel (AKS), ArcelorMittal (MT), Nucor (NUE), Steel Dynamics (STLD), TimkenSteel (TMST) and U.S. Steel (X). Reference Link
Nucor price target raised to $46 from $42 at BMO Capital » 08:1106/1906/19/20
BMO Capital analyst David…
BMO Capital analyst David Gagliano raised the firm's price target on Nucor to $46 from $42 after its above-consensus Q2 earnings guidance, noting the company cited resilient nonresidential construction demand along with a strong recovery in automotive related demand. The analyst still keeps a Market Perform rating on Nucor shares, stating that while the company is a "best-in-class" steel producer, its valuation is approaching fair value.
Nucor says Q2 operating performance 'better than expected' » 09:0806/1806/18/20
The company said,…
The company said, "Nucor's better-than-expected second quarter performance reflects both the power of our culture and the strength of our business model. By working hard and working together, the 27,000 men and women on the Nucor Team have done an excellent job of taking care of each other, our customers, and our shareholders. Second quarter operating performance has been better than expected and we have estimated our guidance range accordingly. Though overall market conditions are still challenged by the pandemic, demand in nonresidential construction has been resilient during this time. Nucor's downstream steel products segment is having another strong quarter. In our steel mills segment, the impacts of the COVID-19 pandemic have most negatively impacted our sheet and plate mills due to weak oil and gas market activity and customer production disruptions. Although domestic automotive production was halted due to COVID-19 concerns, we are seeing a strong rebound in automotive related steel demand. The automotive industry experienced better than expected sales during their outage period resulting in low inventory levels as we enter the third quarter of 2020. Our raw materials segment has been challenged by decreased pricing for raw materials and the impact of an outage at our DRI facility in Trinidad to comply with that country's stay at home orders. We believe Nucor is well positioned to navigate any future challenges that arise from these current situations given our advantaged cost position, flexible production capability and financial strength. We were pleased to be able to further enhance our financial flexibility with the recent issuance of $500.0 million of 2.000% notes due 2025 and $500.0 million of 2.700% notes due 2030."
Nucor sees Q2 EPS 10c-15c, consensus 3c 09:0406/1806/18/20
Commercial Metals downgraded at Citi on valuation, scrap costs » 09:4806/0806/08/20
CMC, NUE, STLD
Citi analyst Alexander…
Citi analyst Alexander Hacking downgraded Commercial Metals to Neutral from Buy with a price target of $21, down from $22, as he lowered his estimates ahead of the company's results based on higher than expected scrap costs. Commercial Metals shares are up about 50% since March and he views the current stock price as fair considering rebar spreads may be peaking.
|Over a month ago|
Iron ore prices jump amid Brazil coronavirus mining disruption, WSJ says » 13:0105/2005/20/20
AKS, MT, NUE, STLD, X, TMST, CLF, FCX, VALE
The severity of the…
The severity of the coronovirus impact in Brazil has disrupted the global supply of iron ore amid ademand pick-up in China. writes the Wall Street Journal's Joe Wallace. "Prices have risen 20% since early April, driven by squeezed supplies from Brazil, which dominates the iron-ore mining industry along with Australia. The rally is also an indication that China's economy is gathering momentum, after a downturn at the start of the year when swaths of the country went into lockdown to stop the coronavirus spreading," added the Wall Street Journal story. Publicly traded companies in the metals and mining space include AK Steel (AKS), ArcelorMittal (MT), Nucor (NUE), Steel Dynamics (STLD), TimkenSteel (TMST) and U.S. Steel (X), Cleveland-Cliffs (CLF), Freeport McMoRan (FCX) and Vale (VALE). Reference Link
Nucor price target raised to $42 from $35 at BMO Capital » 08:2404/2904/29/20
BMO Capital analyst David…
BMO Capital analyst David Gagliano raised the firm's price target on Nucor to $42 from $35 and keeps a Market Perform rating on the shares. The analyst says the company's Q1 results were "solid" even though its Q2 guidance was "understandable weak", adding that it is well-positioned longer term given its resilient results and volume growth potential.
Nucor CEO: The tariffs are still working » 18:2304/2804/28/20
In an interview on…
In an interview on CNBC's Mad Money, Leon Topalian said, "At the end of the day, the low cost producer wins, and we've been the low cost producer for some time." Topalian expects the market to bottom in Q2. He thinks the COVID-19 pandemic will force companies to look at the over-reliance on supply chains from China and make changes. He noted that the Trump administration is "committed to steel."
Nucor cuts FY20 CapEx view to less than $1.5B from $2B » 08:0504/2804/28/20
The company said,…
The company said, "We believe our financial strength will be a critical factor enabling Nucor to weather this sudden economic downturn, while reliably serving our customers, performing for our investors and remaining an employer of choice for our teammates. To preserve our flexibility and reliability during this time, the company has-instituted enterprise-wide efforts to conserve cash and support our teammates, which include, among other things: Capital Expenditures: We have reviewed our capital expenditures budget and decided to freeze spending on certain capital projects currently in process and delay capital projects that have not begun. As a result, we have revised our 2020 capital expenditures estimate down to less than $1.50 billion, from our initial projection of approximately $2.0 billion for the year. Working Capital: Our net working capital position is expected to contract and provide a source of incremental liquidity as business activity has slowed rapidly in recent weeks. In addition, we are taking deliberate steps to reduce raw material inventory, bringing it more in line with our anticipated near-term production requirements. We expect this temporarily reduced investment in working capital to benefit our operating cash flow in the near term. Pay & Benefits: Overall, we expect a significant decrease in compensation expense in 2020 as almost all our remuneration plans are heavily weighted toward incentive compensation which rewards productivity and profitability. Nucor's 'share the pain, share the gain' approach means that every team member at Nucor has a significant portion of their compensation at risk and tied to performance. As a result, we are confident that there will be no need for us to contemplate widespread layoffs during this crisis, just as we had none during the Global Financial Crisis of 2008 and 2009. We have established a Pay & Benefits Task Force that is charged with helping to ensure the financial well-being of our teammates through this crisis. This task force has recommended, and we have implemented, the assurance of a compensation floor to production and non-production hourly teammates pay during the crisis. Nucor teammates can expect to maintain their normal benefits as well. Our executive compensation program intentionally sets base salaries below the market median for similar size industrial and materials companies. With much lower profitability expected in 2020, our executive leadership will incur a significant reduction in earned incentive compensation on an absolute dollar and percentage basis compared to compensation attributable to 2019 performance."