Steel Dynamics (STLD) Scales 52-Week High: What's Driving It?
Steel Dynamics, Inc.’s STLD shares touched a fresh 52-week high of $141.26 on Mar 19 before closing at $140.88.
In the past year, the stock has gained 26.9% compared with the industry’s 15.1% rise in the same period.
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What’s Driving Steel Dynamics?
For the first quarter of 2024, Steel Dynamics issued earnings guidance of $3.51-$3.55 per share. This indicates an improvement from the previous quarter's earnings of $2.61 but calls for a decline from $3.70 in the first quarter of the prior year.
The company anticipates a significant improvement in profitability in its steel operations for the first quarter, which is likely to be driven by increased shipments and earnings across the board. Performance enhancements were registered in its flat-rolled steel operations, particularly in the Sinton Texas Flat Roll Division. Strong demand is consistent in key sectors such as automotive, non-residential construction, energy and industrial segments.
Earnings from the company's metals recycling operations are expected to exceed the previous quarter's levels owing to improved pricing for ferrous and nonferrous materials along with increased volumes.
While the first quarter of 2024 is expected to record historically robust earnings from steel fabrication operations, it is projected to be lower than sequential fourth-quarter results. The downside will likely be caused by seasonally lower shipments and a contraction in metal spread resulting from reduced realized pricing and increased steel input costs. However, the non-residential construction sector remains solid, supported by strong order backlog volumes and favorable pricing trends, driven by factors such as onshoring of manufacturing and ongoing U.S. infrastructure initiatives.
For the first quarter of 2024, the Zacks Consensus Estimate for earnings has increased by 17.7% over the past two months. The Zacks Consensus Estimate for 2024 also moved up by 2.6% over the same period.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), and Ecolab Inc. ECL and Hawkins, Inc. HWKN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $4 per share, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 12.2%. The company’s shares have increased 68% in the past year.
Ecolab has a projected earnings growth rate of 22.65% for the current year. The Zacks Consensus Estimate for ECL’s current-year earnings has been revised upward by 5.4% in the past 60 days. ECL topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied 44.1% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a 26% year-over-year rise. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have surged 72.4% in the past year.
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