How Analysts Rate Steel Stocks amid Market Carnage
There has been a selling wave in equity markets in the past few weeks. While 2018 started off well, markets have pared their 2018 gains. There has been carnage in the past two weeks. Broader markets have fallen almost 10% from the highs in January. Before the recent sell-off, markets had been in an almost unidirectional increase since President Trump’s election in November 2016. Commodities (XME) were also in an uptrend in the last few quarters. Metals, including copper and aluminum, were trading near multiyear highs earlier this year.
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Most steel companies like U.S. Steel Corporation (X), Steel Dynamics (STLD), and Nucor (NUE) posted better-than-expected earnings in 4Q17. The 2018 outlook, especially from AK Steel (AKS), disappointed markets. To add to the somber outlook, broad-based selling in equity markets led to sharp downward price action in steel stocks.
In this series, we’ll discuss how analysts are rating steel stocks amid the market carnage. We’ll also see how Wall Street views steel companies after the 4Q17 earnings season. Analysts tend to change their ratings and target prices after companies’ earnings releases to reflect the quarterly performance and the outlook provided during companies’ earnings calls.
By looking at analysts’ ratings, we can get some insights on what Wall Street expects from a given company. Let’s start by looking at Steel Dynamics’ ratings.