Steel Dynamics, Inc. Braces for Q4 Earnings Report Amidst Steel Price Pressures
Steel Dynamics, Inc. (STLD), based in Fort Wayne, Indiana, is a prominent player in the steel production and metal recycling industry. With a market capitalization of $17.2 billion, the company offers various products including flat rolled steel sheet, engineered bars, and structural beams. Additionally, STLD recycles scrap metals and produces non-residential building components like steel joists, girders, trusses, and decks for construction projects. The company, the leading domestic steel producer and metals recycler, is set to announce its fiscal fourth-quarter earnings for 2024 after the market closes on Wednesday, January 22.
As the earnings report approaches, analysts forecast STLD to report a profit of $1.41 per share on a diluted basis, a 46% decline from the $2.61 per share recorded in the same quarter last year. In the last four quarters, STLD managed to exceed consensus estimates in three instances, while it missed the mark on one occasion.
Yearly Earnings Outlook
For the entire year, analysts predict STLD will report earnings per share (EPS) of $9.95, decreasing by 33.4% from $14.95 in fiscal 2023. Moreover, EPS is expected to see only a slight decline to $9.88 in fiscal 2025.
Stock Performance Compared to Market
STLD’s stock has lagged the S&P 500, which has gained 26.3% over the past 52 weeks, with STLD shares experiencing a 5% drop in value during this period. In contrast, the Materials Select Sector SPDR Fund (XLB) only saw a small decrease of 1.5% over the same timeframe.
Challenges Facing Steel Dynamics
The company’s underperformance can largely be attributed to falling steel prices resulting from increased import volumes from countries outside of China. Additional pressures from oversupply in the market, weak demand across major industries, reduced lead times for steel mills, and ongoing economic uncertainties have also negatively impacted steel prices.
On October 16, STLD released its Q3 results, leading to a 4% increase in share value during the subsequent trading session. The company’s EPS of $2.05 outperformed Wall Street’s expectation of $1.98, while total revenue reached $4.34 billion, surpassing forecasts of $4.25 billion.
Analysts’ Take on STLD Stock
The consensus among analysts for STLD stock is moderately optimistic, resulting in an overall “Moderate Buy” rating. Out of 12 analysts, four recommend a “Strong Buy,” seven suggest a “Hold,” and one proposes a “Strong Sell.” Currently, the average price target for STLD stands at $138.27, which suggests a potential upside of 22.2% from its current trading levels.
On the date of publication,
Neha Panjwani
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy
here.
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