Can U.S. Steel Hold $40?
October 27, 2009 5:41 AM
It goes without saying that analysts are expecting an ugly third-quarter report out of U.S. Steel (NYSE: X) before the bell today with a loss of $2.87 forecast. With other steel names such as AK Steel (NYSE: AKS) and Schnitzer Steel (Nasdaq: SCHN) reporting today, the sector promises to be in play.
Technically speaking, a break below $40 would be a bearish sign for U.S. Steel, the eigth-largest steelmaker in the world. A break below $40 could take the shares to $28.
In all fairness, given the declining sales and lack of profits, U.S. Steel is richly valued at 42 times 2010 earnings and far more expensive than rivals AK Steel, Nucor (NYSE: NUE) and others. That makes the earnings announcement especially pivotal for U.S. Steel's near-term fortunes.
