Steel Dynamics (STLD) Gains as the Market Falls: What You Need to Know

Steel Dynamics (STLD) closed at $77.38 in the last trading session, marking a +0.38% move from the previous day. The stock topped the S&P 500’s 0.79% daily loss. Meanwhile, the Dow Jones lost 0.53% and the tech-heavy Nasdaq lost 0.47%.

Prior to today’s session, shares of the steel producer and metal recycler had gained 30.95% in the past month. That outpaced the basic materials sector’s gain of 10.43% and the S&P 500’s loss of 2.43% during that time.

Wall Street will be looking for positivity from Steel Dynamics as its next earnings report date nears. The company is expected to post EPS of $5.27, up 150.95% from the prior year quarter. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $5.19 billion, up 46.37% from the year-ago period.

Zacks consensus estimates for the full year for STLD call for earnings of $12.21 per share and revenue of $17.87 billion. These results would represent year-over-year variations of -24.11% and -2.93%, respectively.

Any recent changes in analyst estimates for Steel Dynamics should also be noted by investors. These revisions generally reflect the latest short-term trading trends, which may change frequently. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business prospects.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. To benefit from this, we have developed the Zacks Rank, a proprietary model that takes into account these estimation changes and provides an actionable rating system.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable track record of third-party audited success, with No. 1 stocks offering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has risen 1.41% over the past month. Steel Dynamics currently has a Zacks rank of #2 (buy).

In terms of valuation, Steel Dynamics is currently trading at a Forward P/E ratio of 6.31. Its industry sports an average Forward P/E of 4.87, so we can conclude that Steel Dynamics is trading at a premium comparatively.

The Steel – Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Ranking of 37, which places it in the top 15% of over 250 industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

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