Street Calls of the Week
Investing.com - UBS maintained its Buy rating and $158.00 price target on Steel Dynamics (NASDAQ:STLD) following the company’s recent earnings report. The stock, currently trading at $148.19, has received positive attention from analysts, with six analysts recently revising their earnings estimates upward according to InvestingPro data. The company maintains a "GOOD" Financial Health Score of 2.71.
Steel Dynamics reported diluted earnings per share of $2.74, exceeding both consensus estimates of $2.64 and the company’s own preannounced range of $2.60-$2.64 from September 15.
The earnings beat was partially attributed to lower-than-expected interest expenses, which were approximately $20 million below UBS estimates quarter-over-quarter.
Despite the earnings outperformance, Steel Dynamics posted adjusted EBITDA of $664 million, which was 2% below consensus due to lower margins in Steel Mills and larger losses in the aluminum segment.
UBS maintained its 8x target EV/EBITDA multiple for Steel Dynamics and indicated it does not expect significant movement in the company’s share price following these results.
In other recent news, Steel Dynamics, Inc. announced its third-quarter 2025 earnings guidance, projecting earnings per share between $2.60 and $2.64. This forecast indicates growth from both the previous quarter’s $2.01 and the year-ago period’s $2.05 per share. The company anticipates improved profitability in its steel operations due to robust shipments and favorable metal spreads, as scrap raw material costs are expected to decline. In another development, Steel Dynamics plans to acquire the remaining 55% stake in New Process Steel, a metals solutions company, enhancing its supply-chain management capabilities. Additionally, Steel Dynamics declared a cash dividend of $0.50 per share for the third quarter of 2025, payable to shareholders of record by the end of September. The International Trade Commission’s ruling on imports of corrosion-resistant steel, which affected Steel Dynamics, could also have implications for the U.S. steel industry. BMO Capital has reiterated its Outperform rating for Steel Dynamics, with a price target of $150.00, noting that the company’s earnings expectations surpass consensus estimates. These developments highlight significant strategic and financial activities for Steel Dynamics.
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