U.S. Steel Stock Rises on Takeover News Despite Earnings Challenges
United States Steel (X) shares rose by 9.5% in the last trading session, closing at $33.99. This increase came with robust trading volume, indicating that significantly more shares were bought and sold than usual. However, it should be noted that the stock has seen a decline of 24.2% over the past month.
The recent surge in U.S. Steel’s stock price is linked to reports that Nippon Steel has suggested granting the U.S. government veto rights over any future cuts in U.S. Steel’s production. This proposal aims to gain President Joe Biden’s support for Nippon Steel’s imminent acquisition of the Pennsylvania-based steel company.
Looking ahead, U.S. Steel is projected to report a quarterly loss of $0.03 per share. This figure reflects a stark year-over-year decrease of 104.5%. Analysts estimate revenues to hit $3.56 billion, which is a 14.2% drop compared to the same quarter last year.
Understanding earnings and revenue expectations plays a crucial role when assessing a company’s stock potential. However, historical data suggests that shifts in earnings estimates often correlate strongly with short-term stock movements. For U.S. Steel, the consensus estimate for earnings per share has been lowered by 188.2% over the past month. Typically, such downward revisions do not correlate well with stock price growth. Therefore, it’s important to watch how U.S. Steel’s stock performs in the future to see if this recent rise can become a sustained trend.
The stock has a Zacks Rank #3 (Hold). For additional information, you can view the complete list of Zacks Rank #1 (Strong Buy) stocks here >>>>.
U.S. Steel operates within the Zacks Steel – Producers industry. Another notable competitor, Nucor (NUE), concluded the last trading day up 0.7% at $116.71, but has faced a decline of 25.9% over the preceding month.
As for Nucor, its consensus EPS estimate for the coming report has dropped by 32.5% in the last 30 days to $0.71. This marks a significant 77.5% decrease from its earnings during the same period last year. Currently, Nucor holds a Zacks Rank of #5 (Strong Sell).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
