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Steel Dynamics (STLD) Dips More Than Broader Markets: What You Should Know

·3 min read

Steel Dynamics (STLD) closed the most recent trading day at $86.24, moving -0.73% from the previous trading session. This change lagged the S&P 500's daily loss of 0.67%. Elsewhere, the Dow lost 0.57%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the steel producer and metals recycler had gained 11.54% over the past month. This has outpaced the Basic Materials sector's gain of 8.36% and the S&P 500's gain of 3.65% in that time.

Wall Street will be looking for positivity from Steel Dynamics as it approaches its next earnings report date. On that day, Steel Dynamics is projected to report earnings of $4.86 per share, which would represent a year-over-year decline of 2.02%. Meanwhile, our latest consensus estimate is calling for revenue of $5.48 billion, up 7.62% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $21.33 per share and revenue of $21.86 billion. These totals would mark changes of +32.57% and +18.74%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Steel Dynamics. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.23% higher within the past month. Steel Dynamics is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Steel Dynamics has a Forward P/E ratio of 4.07 right now. For comparison, its industry has an average Forward P/E of 2.96, which means Steel Dynamics is trading at a premium to the group.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 215, putting it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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