Market Overview

Nucor Upgraded On US Infrastructure Spending Prospects

Nucor Upgraded On US Infrastructure Spending Prospects
Related NUE
10 Stocks To Watch For October 18, 2018
Earnings Scheduled For October 18, 2018
Nucor -3% as Q4 earnings seen dropping off from strong Q3 gains (Seeking Alpha)

Nucor Corporation (NYSE: NUE) traded higher Tuesday after one Street analyst gave the stock his vote of approval.

The Analyst

KeyBanc Capital Markets analyst Philip Gibbs upgraded Nucor from Sector Weight to Overweight and and set a $77 price target.

The Thesis

Self-help growth initiatives in fabrication and raw materials will provide Nucor with more of an earnings boost in 2019 than previously anticipated, Gibbs said in the upgrade note. (See the analyst's track record here.) 

KeyBanc raised its 2018 EPS forecast from $4.68 to $5.40.

“Further, company-specific drivers could add 20 percent to our EPS power view over time, while visible FCFE momentum [$3.3 billion from the second half of 2018 to 2019] and optionality to any nascent pickup in infrastructure spending provide further upside potential," the analyst said. 

Steel growth projects, stock buybacks and other drivers could push 2019 EPS as high as $6.50 and KeyBanc’s price target as high as $85, Gibbs said. 

KeyBanc is targeting 2019 steel prices of $675/ton for HRC.

Nucor’s pristine balance sheet is only getting stronger, Gibbs said. 

Attention will slowly shift away from trade war uncertainty back to Nucor’s organic growth pipeline and a potential boost from U.S. infrastructure spending, in KeyBanc's view.

The Trump administration’s top priority is the trade war, but that attention could soon shift to domestic infrastructure, Gibbs said; roughly half of Nucor’s demand comes from nonresidential construction spending.

KeyBanc is predicting that Nucor will top consensus EPS and revenue expectations in the second quarter.

Price Action

Nucor shares were trading 2.68 percent higher at $68.51 at the time of publication Tuesday.

Related Links:

An Overlooked Loser In The Trade War: The VIX

A Trade War Primer: The Tariffs Imposed, Threatened, And Expected By The US, Canada, Mexico, China And The EU

Latest Ratings for NUE

Oct 2018Credit SuisseDowngradesOutperformNeutral
Oct 2018Seaport GlobalInitiates Coverage OnBuy
Jul 2018KeyBancUpgradesSector WeightOverweight

View More Analyst Ratings for NUE
View the Latest Analyst Ratings

Posted-In: KeyBanc Capital Markets Philip GibbsAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (NUE)

View Comments and Join the Discussion!

Latest Ratings

SBEvercore ISI GroupUpgrades4.5
PTIRBC CapitalUpgrades0.0
GPSJP MorganDowngrades24.0
GIIIB. Riley FBRUpgrades47.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Oregon's Cannabis Business Is Going Through Some Growing Pains

Food And Beverage Earnings: Reports Coming Up From Coca-Cola And McDonald's