Wang & Lee Group board approves 250-to-1 reverse share split
On Tuesday, Citi reaffirmed its Buy rating on Steel Dynamics stock (NASDAQ:STLD), maintaining a price target of $145.00. The steel manufacturer, currently valued at $18.76 billion, trades at an attractive P/E ratio of 12.66. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value assessment. The firm’s analyst, Alexander Hacking, noted that Steel Dynamics is projecting a first-quarter 2025 earnings per share (EPS) in the range of $1.36 to $1.40, which translates to an expected EBITDA of $417 million. This guidance is below Citi’s initial estimate, which anticipated an EPS of $1.64 and EBITDA around $471 million. The analyst attributed the discrepancy to lower realized pricing due to contractual lags, despite using a hot-rolled coil (HRC) price assumption of $725 per short ton.
Steel Dynamics’ Sinton facility achieved operational levels above 90% in the first quarter of 2025, and it is anticipated to reach profitability in the second quarter of 2025. The company’s fabrication segment experienced a decrease in shipments and recorded a less than 5% sequential drop in realized pricing. Despite market fluctuations, InvestingPro data shows the company maintains strong financial health with a "GOOD" overall score, and has consistently raised its dividend for 12 consecutive years, currently offering a 1.6% yield. However, the company expects backlogs to extend well into the third quarter of 2025, with improved pricing supported by demand from data centers, manufacturing, and warehouses, mirroring trends reported by Nucor Corporation (NYSE:NUE) and other sectors.
Additionally, Steel Dynamics’ Aluminum segment marked a milestone with the casting of its first aluminum ingot in January. Construction on the Hot Line and the No.1 Cold Rolling Mill is nearing completion. The company anticipates beginning shipments of material in mid-2025, signaling an expansion into the aluminum market.
Steel Dynamics’ forward outlook is bolstered by extended backlogs and the potential for better pricing in the upcoming quarters. The company’s strategic moves, including the nearing completion of aluminum segment facilities, are poised to contribute to its growth trajectory in the latter half of the year. Analyst targets range up to $165 per share, reflecting confidence in the company’s growth strategy. For deeper insights into Steel Dynamics’ financial health and growth prospects, including exclusive ProTips and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Steel Dynamics has successfully completed a $1 billion notes offering, consisting of $600 million of 5.250% Notes due in 2035 and $400 million of 5.750% Notes due in 2055. The proceeds from this transaction are intended for general corporate purposes, including the repayment of existing debt. In a related development, Wolfe Research has upgraded Steel Dynamics’ stock rating from Underperform to Peer Perform, following President Trump’s announcement of a 25% tariff on all steel imports. The firm anticipates an increase in hot-rolled coil steel prices, which could benefit Steel Dynamics in the near term. Additionally, the U.S. steel industry, including Steel Dynamics, is poised to benefit from the tariff measures, as investors expect reduced competition from Canadian imports. President Trump’s tariff policy has already resulted in increased stock prices for major steel companies. As these developments unfold, the financial community will closely monitor their impact on Steel Dynamics and the broader steel industry.
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