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United States Steel (X) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

United States Steel (X) closed at $15.62 in the latest trading session, marking a +1.56% move from the prior day. This change outpaced the S&P 500's 0.69% gain on the day. Elsewhere, the Dow gained 0.65%, while the tech-heavy Nasdaq added 0.58%.

Coming into today, shares of the steel maker had gained 6.44% in the past month. In that same time, the Basic Materials sector gained 1.87%, while the S&P 500 gained 1.36%.

Investors will be hoping for strength from X as it approaches its next earnings release, which is expected to be August 1, 2019. On that day, X is projected to report earnings of $0.40 per share, which would represent a year-over-year decline of 72.6%. Our most recent consensus estimate is calling for quarterly revenue of $3.37 billion, down 6.53% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.69 per share and revenue of $13.19 billion. These totals would mark changes of -87.13% and -7%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for X. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 24.04% lower within the past month. X is currently a Zacks Rank #3 (Hold).

Digging into valuation, X currently has a Forward P/E ratio of 22.29. This represents a premium compared to its industry's average Forward P/E of 11.37.

We can also see that X currently has a PEG ratio of 2.79. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Steel - Producers stocks are, on average, holding a PEG ratio of 2.31 based on yesterday's closing prices.

The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 229, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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