Steel Dynamics stock holds steady as Citi reiterates Buy rating

Investing.com - Steel Dynamics (NASDAQ:STLD), a steel producer with a market capitalization of nearly $20 billion and strong financial health according to InvestingPro, maintained its Buy rating from Citi, with the firm reaffirming its $150.00 price target on Tuesday. The company’s stock currently trades near $134, with analysts’ consensus suggesting potential upside.

Steel Dynamics reported second-quarter earnings per share of $2.01, aligning with the company’s late-quarter guidance range of $2.00-2.04. The steel producer, which has maintained dividend payments for 22 consecutive years and currently offers a 1.5% yield, noted strong underlying demand trends, though some customer hesitancy exists due to trade policy uncertainty. InvestingPro analysis reveals 10+ additional key insights about the company’s performance and outlook.

The company’s steel mills segment experienced margin expansion driven by improved pricing, with demand coming from energy, non-residential construction, automotive, and industrial sectors. Meanwhile, the fabrication segment saw sequentially weaker results as raw material costs increased while average selling prices moderated slightly.

Steel Dynamics expects its fabrication segment to improve in the third quarter, with order backlog up 15% year-to-date. The company also reported that its aluminum mill shipped its first coil, though ramp-up guidance has been adjusted downward.

Citi analyst Alexander Hacking expects Steel Dynamics stock to trade in line with the market, noting the company’s aluminum mill is now projected to exit 2025 at a 40-50% production rate versus the previous 50% target, and to exit 2026 at 75% versus the earlier 85% projection.

In other recent news, Steel Dynamics announced its second quarter 2025 earnings guidance, projecting earnings between $2.00 and $2.04 per share. This is an increase from the first quarter’s $1.44 per share but falls short of the $2.72 per share reported in the same period last year. The company cited expanded metal spreads as a factor for improved profitability. Additionally, S&P Global Ratings revised its outlook on Steel Dynamics from stable to positive, reflecting the company’s steady financial performance and reduced project risk. This outlook change is supported by the nearing completion of Steel Dynamics’ $2.7 billion aluminum rolling mill project. KeyBanc recently adjusted its price target for Steel Dynamics to $153.00 from $155.00, maintaining an Overweight rating, citing softer near-term galvanized spreads. Leadership changes are also underway, with Glenn Pushis retiring and Miguel Alvarez taking on new responsibilities within the company. Lastly, Steel Dynamics’ shareholders elected nine directors and ratified Ernst & Young LLP as auditors during their Annual Meeting of Shareholders.

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