Steel prices – and related stocks could be headed higher.
All with the current supply-demand imbalance.
Plus, with a potential $1 trillion infrastructure plan designed to fix U.S. roads, bridges, and ports, there’s no telling how high steel prices could run. “It’s crazy for steel,” said Brian Nelson, president of HCC Inc., which sells large metal accessories to tractor manufacturers, as quoted by Fox Business. “I can’t even get material at times.”
Until there’s a resolution to the imbalance, steel prices will rise.
Steel stocks to consider are US Steel (X), Steel Dynamics (STLD), and Nucor (NUE)
With higher demand for steel, US Steel now expects to post record EBITDA numbers in the third quarter. In fact, according to David B. Burritt, President and CEO, as noted by Street Insider, “the expected Q3 adjusted EBITDA will be a record result for the company, supported by strong reliability and quality performance, sustained customer demand, and continued increases in steel selling prices.”
Steel Dynamics just said earnings are on track to outperform year-earlier numbers, seeing Q3 EPS in a range of $4.88 and $4.92, which is above estimates for $4.29. Three, there’s substantial demand for steel at the moment. In addition, analysts at Deutsche Bank just raised their target price to $98 from $72.
Even Nucor just “third quarter earnings to be in the range of $7.30 to $7.40 per diluted share. Third quarter of 2021 earnings are expected to be the highest quarterly earnings in Nucor history, surpassing the previous record of $5.04 per diluted share set in the second quarter of 2021,” as noted by a company press release.
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