NUE

Nucor Corporation

105.64
USD
1.18%
105.64
USD
1.18%
87.71 187.90
52 weeks
52 weeks

Mkt Cap 31.03B

Shares Out 293.70M

Chat
Send me real-time posts from this site at my email

Why Nucor Stock Gave Back Its Gains Today

What happened Investors in steel giant Nucor (NYSE: NUE) had a great day on Thursday, with the stock exploding as much as 11% higher before succumbing to selling pressure on a red day for the markets, and ending with just a 3.7% gain. Today, the selling continues. Indeed, with its 6.5% loss as of 11:50 a.m. ET this morning, Nucor stock has been dragged down below where it traded before reporting its earnings beat yesterday. Is that fair? So what Nucor beat earnings yesterday. Analysts forecast the company would earn only $7.30 per share in its fiscal first quarter, but it actually earned $7.67. What's more, management predicted that the upcoming second quarter will be the most profitable quarter in its history, buoyed by strong demand for steel, high prices in the company's raw materials division, and increased profitability at its sheet and plate mills. As my Motley Fool colleague Reuben Brewer pointed out yesterday, Nucor's sales rose only 1% sequentially in the first quarter on slightly lower steel prices. Combined with the market as a whole selling off, this may have been enough to give investors second thoughts about wanting to own Nucor today. And yet, if not up much sequentially, revenue was still up 50% year over year. Now what Viewed in that context, the relatively weaker growth quarter-to-quarter since the end of last year doesn't seem like a good reason to suddenly turn around and start selling Nucor stock -- certainly not when it's selling for less than 6 times earnings, and still paying a 1.2% dividend yield. Admittedly, Nucor is a cyclical company, and with earnings pegged for more than $28 per share this year (according to analysts polled by S&P Global Market Intelligence), and forecast to drop back down below $10 next year (also according to analysts), Nucor is probably closer to the top of its profits cycle than to the bottom right now. But with so much of the global steel industry essentially taken off-line by the war in Ukraine, and little prospect for the lifting of sanctions on Russia in the near term, I suspect Nucor's historically high profits might last a bit longer than many investors expect -- and I wouldn't bet on that big drop in 2023 actually happening as forecast. I believe the folks buying Nucor stock have a better argument than the people selling Nucor stock today. 10 stocks we like better than Nucor When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Nucor wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 7, 2022 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue