Steel Dynamics (STLD – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Lawson Winder from Bank of America Securities remains neutral on the stock and has a $125.00 price target.
Lawson Winder has given his Hold rating due to a combination of factors impacting Steel Dynamics’ performance and market conditions. Steel Dynamics’ fourth-quarter earnings per share (EPS) were reported to be at the lower end of the company’s guidance and slightly below both Bank of America’s and consensus estimates. The Steel Operations segment performed as expected, but the Steel Fabrication and Metals Recycling segments fell short, mainly due to lower pricing and volumes, respectively. Moreover, while Steel Dynamics anticipates increased demand driven by federal initiatives, Winder remains cautious due to the current correction in U.S. hot-rolled coil (HRC) pricing and the potential increase in supply both domestically and from imports.
The company’s forward-thinking strategies, such as the Sinton ramp-up and federal funding support, are positive. However, concerns over HRC pricing persist, prompting a balanced outlook. Winder suggests attention should be directed towards issues like fabrication backlog pricing, the progress of the Sinton facility, dividend strategies following significant increases in the past, and share buybacks amidst the company’s planned heavy capital expenditures for the upcoming year. These factors, along with updates on the aluminum rolling mill, will likely be critical in the decision to maintain the current Hold rating on Steel Dynamics’ stock.
In another report released on January 16, UBS also initiated coverage with a Hold rating on the stock with a $120.00 price target.
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Based on the recent corporate insider activity of 112 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of STLD in relation to earlier this year.
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Steel Dynamics (STLD) Company Description:
Steel Dynamics, Inc. engages in the manufacture of steel products and metal recycling. It operates through the following segments: Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Other. The Steel Operations segment consists of sheet products including hot roll, cold roll, and coated steel; long products including structural steel beams, pilings, and standard and premium grade rail; and steel finishing services such as turning, polishing, straightening, chamfering, threading, and precision saw-cutting. The Metals Recycling Operations segment provides an array of both ferrous and non-ferrous scrap recycling, scrap management, transportation, and brokerage products and services. The Steel Fabrication Operations segment offers steel joists, girders, and steel deck, including specialty deck. The Other segment comprises of subsidiary operations and certain unallocated corporate accounts. The company was founded by Keith E. Busse, Mark D. Millett, Richard P. Teets and John C. Bates in August 1993 and is headquartered in Fort Wayne, IN.
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