12.20 0.00 (0.00%)
After hours: 5:08PM EDT
|Bid||12.18 x 2200|
|Ask||12.23 x 900|
|Day's Range||11.73 - 12.25|
|52 Week Range||5.60 - 12.25|
|PE Ratio (TTM)||8.23|
|Earnings Date||Oct 18, 2018 - Oct 22, 2018|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||11.89|
Metals and mining stocks are showing strength. As of 1:00 PM EDT on September 18, Freeport-McMoRan (FCX) and Alcoa (AA) have risen 2.9% and 1.1%, respectively. In the steel space, U.S. Steel Corporation (X) and Cleveland-Cliffs (CLF) are trading with gains of 2.5% and 3.1%, respectively.
Earlier this year, President Trump imposed tariffs on US steel and aluminum imports. US steel companies like U.S. Steel Corporation (X) and AK Steel (AKS) have blamed more imports for their woes. Notably, China’s share in the global steel and aluminum markets has grown multi-fold.
Cleveland-Cliffs (CLF) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
Zacks.com highlights: Cleveland-Cliffs, North American Construction Group, General Finance, Vertex Energy and Photronics
As noted in the previous article, steel companies’ valuations look attractive based on forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples. However, these multiples are based on analysts’ earnings estimates, so it is prudent to read the multiples in conjunction with earnings estimates.
China (FXI) is the world’s largest steel producer and consumer. The country’s steel overcapacity and exports have been blamed for depressing global steel prices. However, Chinese steel exports have come down sharply from their 2015 highs. In August, China exported 5.8 million metric tons of steel products, a yearly fall of 9.8%. In the first eight months of 2018, Chinese steel exports have fallen 13.3% to 47.2 million metric tons.
President Trump has left the door open for exemptions from Section 232 tariffs. The exemptions would be on a product level as well as a country level. So far, countries like South Korea, Brazil, and Argentina have managed to see exemptions from Section 232 tariffs. The uncertainty about Section 232 exemptions is one reason why investors have shied away from steel stocks. In this article, we’ll see how Section 232 exemptions could impact US steel prices.
According to AISI (American Iron and Steel Institute) data, US steel production rose 9.8% YoY in the week ending September 8. On a year-to-date basis, US steel production has risen 4.1% compared to the same period in 2017.
While several industries have been crying foul over President Trump’s trade policies, the US steel industry has been among the biggest benefactors of these trade policies. Earlier this year, Trump imposed a 25% tariff on US steel imports, triggering a wave of joy in US steel companies. To be sure, we’ve started to see the impact of these tariffs on the US steel industry. US steel production has gained traction, while imports have fallen on a yearly basis this year.
Steel stocks, including U.S. Steel Corporation (X), ArcelorMittal (MT), and AK Steel (AKS), are trading with double-digit losses this year. But after a rather dismal 2018, steel stocks could be at a tipping point.
Today, J.P. Morgan (JPM) upgraded Rio Tinto (RIO), believing that demand from China (FXI) should pick up over the coming months. It also believes that miners’ valuations are cheap compared to the same stages of previous cycles.
Upgrades and Buybacks: Are US Steel Stocks at a Tipping Point? AK Steel (AKS) has been one of the worst-performing steel stocks this year based on a year-to-date price action. U.S. Steel Corporation (X) and ArcelorMittal (MT) have fallen 17.2% and 11%, respectively, over that period.
Earlier this year, President Trump imposed Section 232 tariffs on US steel and aluminum imports. September marks the sixth month since tariffs came into effect. The tariffs have helped lift US steel production and curb imports. On a year-to-date basis, US steel imports have fallen 10.3% year-over-year in the first seven months of 2018. Steel imports from China have also fallen. In the first six months of 2018, China exported 0.34 million metric tons of steel to the US, which is ~2.1% of the total US steel imports during this period. US steel and iron ore producers like U.S. ...
Today, Jefferies analyst Seth Rosenelf raised the target price for Cleveland-Cliffs (CLF) from $11 to $13 while maintaining a “buy” rating on the stock. Cleveland-Cliffs stock has seen a turn in fortunes, as far as analyst sentiment is concerned, since March.
The number of analysts recommending a “buy” for Vale (VALE) has increased in the last few months. Currently, 73.0% of the analysts covering Vale stock recommend a “buy,” compared with 56.0% at the end of April. Approximately 23.0% of analysts recommend a “hold,” and 4.0% recommend a “sell.” Vale’s target price implies a 17.0% upside based on its current market price.
AK Steel (AKS) has been the worst-performing steel stock among the steel companies we’re covering in this series based on YTD (year-to-date) price action. The stock has fallen 23.1% YTD.
US steel stocks are having a dismal run so far in 2018. Based on September 6 closing prices, U.S. Steel (X) and AK Steel (AKS) have lost 15.5% and 25.3%, respectively. Cleveland-Cliffs (CLF) has bucked this trend, and the stock is up 44.0% year-to-date (or YTD). In comparison, the SPDR S&P 500 ETF (SPY) has gained 8.9% YTD.
Of the 14 analysts covering Rio Tinto (RIO) stock, 57.0% recommend a “buy,” 29.0% recommend a “hold,” and 14.0% recommend a “sell.” One year ago, 80.0% of analysts recommended a “buy.”
According to Thomson Reuters, 73.0% of the analysts covering Cleveland-Cliffs (CLF) stock recommend a “buy,” 27.0% recommend a “hold,” and there were no “sell” ratings. CLF’s target price of $11.90 implies an upside of 21.0% based on its current market price. At the end of March, Cleveland-Cliffs had “buy” ratings from only 30.0% of the analysts.
Steel stocks U.S. Steel Corporation (X) and AK Steel (AKS) are trading at yearly losses. In this article, we’ll see what could be making markets bearish on U.S. Steel.
According to the consensus compiled by Thomson Reuters, 17 analysts cover BHP Billiton (BHP) stock. Of these analysts, 53.0% recommend a “buy,” 41.0% recommend a “hold,” and 6.0% recommend a “sell” for BHP stock.
U.S. Steel Corporation (X) has received a mean consensus price target of $44.21, which represents a 50.4% upside over its September 5 closing price. U.S. Steel has fallen 16.2% so far this year.
On August 31, Platts reported, “Steel mills throughout the US issued cancellation notices this week for undelivered August scrap, effective at the close of business Friday, as they prepared to buy lower next week following the US Labor Day holiday.” The report also adds, “The cancellation notices came as no surprise to scrap suppliers who have been bracing for a September scrap fall.”