I just wrote about iron miners getting pounded; now it’s time for the steel stocks like US Steel (X), AK Steel (AKS) and Steel Dynamics (STLD).
ASSOCIATED PRESS US Steel has dropped 2.4% to $24.24 at 2:50 p.m., while AK Steel has fallen 0.9% to $6.26, Steel Dynamics has declined 3.4% to $17.11, and Nucor (NUE) is off 1.1% at $49.58. And yes, it’s for the same reason that iron miners are getting pounded: China.
The funny thing: Nomura’s Curt Woodworth upgraded US Steel to Buy from Neutral. He explains why:
[Free cash flow potential significant] as US Steel transformation elevates earnings profile. We are upgrading US Steel to Buy and increasing our PT to $32 from $27 to account for higher through-the-cycle EBITDA / FCF generation. After the stock's 18% correction since January (vs. S&P500 +2%), we see many reasons to own [US Steel]. After meeting with the CEO and CFO last week, we have increased conviction in the company's direction as well as the opportunity sets in the commercial, financial, and operating functions of the business. We see US Steel's cash flow significantly increasing in the coming years.
Well, after today’s drop, that would make US Steel an even better buy, wouldn’t it?
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