In a report released yesterday, Alexander Hacking from Citi maintained a Hold rating on Nucor (NUE – Research Report), with a price target of $180.00.
Geoff Meacham has given his Hold rating due to a combination of factors including the company’s solid financial performance and the outlook for the upcoming quarter. Nucor exhibited robust fourth-quarter results, with earnings per share surpassing expectations and a notable cash position that now exceeds its debt. However, the company’s EBITDA showed a slight decline compared to Citi’s estimates and a more significant quarter-over-quarter and year-over-year decrease. The free cash flow remained strong, and Nucor continues its share repurchase program, signaling a confident approach to capital allocation.
Additionally, Nucor’s guidance anticipates stronger results in the first quarter of 2024, with improved earnings in the steel mills segment due to higher average selling prices and volumes. This positive outlook, however, is tempered by an expected decrease in the steel products segment’s earnings and an increase in capital expenditures over Citi’s initial forecast. Taking these elements into account, including the mixed performance in different business segments and the increased capital expenditures, it is anticipated that the stock will perform in line with market expectations, thus warranting a Hold rating.
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Nucor (NUE) Company Description:
Nucor Corp. engages in the manufacturing of steel and steel products. It operates through the following segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment comprises carbon and alloy steel in sheet, bars, structural and plate; steel trading businesses; rebar distribution businesses; and Nucor’s equity method investments. The Steel Products segment includes steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, steel grating, tubular products businesses, piling products business, and wire and wire mesh. The Raw Materials segment consists direct reduced iron, and ferrous and nonferrous metals. The company was founded by Ransom E. Olds in 1905 and is headquartered in Charlotte, NC.
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