Will U.S. Steel Deliver EPS Growth? Experts & Crowd Disagree

Shares of United States Steel Corporation X were up on Tuesday as the company prepares to report its first quarter financial results after the market closes.

According to Estimize, there is a big divergence between experts’ expectations and the crowd’s expectations. Wall Street analysts are modeling consensus EPS of $0.27 on revenue of $3.5 billion. The crowd, for its part, projects consensus EPS of $0.50 on revenue of $3.694 billion.

In the first quarter of 2014, the company reported EPS of $0.34; this means that while the crowd is expecting considerable year-over-year growth, the Street is anticipating a substantial decline. However, it is important to note that U.S. Steel beat consensus in the last three consecutive quarters.

The graph below illustrates this point:

It is also possible to see how estimates have changed over time.

Estimates have been consistently falling over the quarter, with both the crowd and experts losing confidence in the company – crowd sentiment experienced a particularly steep decline over the past few days.

What Analysts Are Saying

Clarkson Capital Markets recently initiated coverage on Metals & Miners, rating U.S. Steel a Sell, and setting the price target at $18. The firm said it had given it a Sell rating “for its high fixed costs and reliance on the U.S. energy sector.”

Citigroup also maintains a Sell rating and a $15 price target. Barclays maintains an Equal-weight rating and a $24 price target. Deutsche Bank is the most bullish, rating the stock a Buy and fixing the price target at $45.