Nucor (NUE – 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 $190.00 price target.
Lawson Winder has given his Buy rating due to a combination of factors related to Nucor’s recent performance and future prospects. Firstly, Nucor’s fourth-quarter earnings surpassed expectations, including those set by Bank of America’s estimates, largely due to strong results in their Steel Mills and Steel Products segments. This outperformance was driven by higher shipments, favorable pricing dynamics, and lower conversion costs, alongside a favorable tax rate. Additionally, Nucor provided guidance for the first quarter of the next year that suggests continued improvement in earnings, supported by better pricing and volumes, particularly in the sheet mills segment.
Winder’s positive outlook is further bolstered by Nucor’s robust cash flow generation and shareholder returns. The company demonstrated strong operating cash flow in the fourth quarter, significantly exceeding Bank of America’s estimates, and showcased impressive capital discipline with lower-than-expected capital expenditures, leading to substantial free cash flow. Furthermore, Nucor has a robust policy of returning value to shareholders, as evidenced by their share repurchases and dividends, which accounted for a significant percentage of net income in the prior year. This financial prudence, combined with their net cash position, underscores Winder’s confidence in maintaining a Buy rating for Nucor’s stock.
In another report released on January 16, UBS also initiated coverage with a Buy rating on the stock with a $210.00 price target.
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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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