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On Tuesday, Jefferies adjusted its stance on US Steel (NYSE:X), downgrading the stock from Buy to Hold despite increasing the price target to $55.00, up from the previous target of $50.00. The revision followed a significant surge in the company’s share price last week.
The upgrade in price target reflects a new valuation after President Trump announced on Friday his approval of a partnership between US Steel and Nippon Steel. The nature of the partnership remains unclear, but the market’s response suggests expectations of a potential full acquisition at $55 per share.
The announcement from the former President led to a 21% leap in US Steel shares on Friday, prompting analysts at Jefferies to reassess the stock’s standing. Christopher LaFemina, representing the firm, noted the bullish market reaction and accordingly raised the price target.
LaFemina explained that the decision to downgrade the rating to Hold was based on the recent rally, which has brought the stock closer to the new price target. The market’s optimism about the deal’s implications for US Steel has been a driving force behind the stock’s performance.
The updated rating and price target from Jefferies reflect the latest developments and market sentiment surrounding US Steel and its potential partnership with Nippon Steel. The firm’s analysis provides investors with a revised outlook on the stock following the recent price movement.
In other recent news, United States Steel Corporation announced a dividend of $0.05 per share, set to be distributed on June 11, 2025, to shareholders recorded by May 12, 2025. Additionally, U.S. Steel has expanded its Omnibus Incentive Compensation Plan, increasing available shares by 9,730,000 and extending the plan’s duration by ten years, following stockholder approval. This corporate update also includes amendments to the company’s Certificate of Incorporation, aligning with Delaware General Corporation Law, which were approved at the recent Annual Meeting of Stockholders. In merger-related developments, Nippon Steel is considering a $14 billion investment in U.S. Steel, which includes plans for a new steel mill. This potential investment is part of ongoing merger discussions that have faced scrutiny due to national security concerns and are currently under review by the Committee on Foreign Investment in the United States. The United Steelworkers union has called on President Trump to reject Nippon Steel’s proposed takeover, citing concerns about undermining the domestic industry. Meanwhile, Nippon Steel’s Takahiro Mori is scheduled for meetings in Washington and Pennsylvania to advance the merger talks. These developments reflect significant strategic decisions and challenges facing U.S. Steel as it navigates potential changes in ownership and corporate governance.
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