Core Viewpoint - The current downturn in the steel industry presents a buying opportunity for companies in cyclical industries, but investors should focus on the strongest competitors, specifically Nucor and Steel Dynamics, rather than United States Steel [1]. Group 1: United States Steel - United States Steel has a historic reputation but is currently struggling, described as a "shell" of its former self, which has attracted acquisition interest from Nippon Steel [2]. - The company relies heavily on blast furnaces, an older and costly steelmaking technology, which is less efficient during periods of low demand and pricing [4]. - U.S. Steel is projected to lose at least $0.49 per share in Q1 2025, indicating significant financial challenges ahead [4][5]. - The business model of U.S. Steel is particularly vulnerable during the current industry downturn, making it a risky investment compared to its competitors [8]. Group 2: Competitors - Nucor and Steel Dynamics - Nucor and Steel Dynamics utilize electric arc mini-mills, which are more flexible and can adjust production based on demand, allowing them to maintain better profit margins [6]. - Despite the industry downturn, Nucor expects earnings between $0.45 and $0.55 per share, while Steel Dynamics projects earnings of $1.36 to $1.40 per share, indicating they will remain profitable [7]. - Both companies have seen significant stock price declines, with Nucor down 40% and Steel Dynamics down 20% from their 52-week highs, making them more attractively priced for potential investors [9].

Shares of Steel Dynamics, Inc. (NASDAQ: STLD ) plunged 9% on Thursday as investors reacted to President Trump’s reciprocal tariff announcement, and shares are now moving back toward a 52-week low. As a domestic steel producer, STLD does not haveOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let ...

Industry Overview - U.S. steel prices have surged over 25% this year, primarily due to a 25% tariff on all steel imports imposed by the Trump administration, which has restricted supply and allowed domestic mills to raise prices [1][3] - The tariffs have created a supply crunch in the domestic market, leading to increased demand for U.S. steel as foreign steel becomes more expensive [3] - Infrastructure spending and strong demand from the construction and automotive sectors have further supported the price rally, with hot-rolled coil (HRC) prices rising past $900 per short ton [4] Company Highlights Nucor Corporation (NUE) - Nucor has a diverse product portfolio and a strong presence in the construction and automotive sectors, maintaining profitability through operational efficiency and cost management [7] - The company is committed to boosting production capacity, which is expected to drive profitable growth and enhance its position as a low-cost producer [8] - Nucor's earnings have beaten the Zacks Consensus Estimate in three of the last four quarters, with a trailing four-quarter earnings surprise of approximately 27.2% [9] Steel Dynamics, Inc. (STLD) - Steel Dynamics is experiencing strong customer order activity for flat-rolled steel and is executing projects to increase capacity and profitability [10] - The company has consistently outperformed the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of about 3.6% [11] United States Steel Corporation (X) - U.S. Steel is focused on operational efficiency and cost management, particularly in its North American Flat-Rolled segment, and is executing its "Best for All" strategy [12] - The company has received positive customer feedback on the quality of products from its Big River 2 mill, which is expected to enhance its earnings as it approaches full operational capacity [12] - U.S. Steel's earnings have also beaten the Zacks Consensus Estimate in three of the last four quarters, with a trailing four-quarter earnings surprise of roughly 20.4% [13]

Company Performance - Steel Dynamics (STLD) ended the latest trading session at $127.09, reflecting a +1.72% change from the previous day's close, outperforming the S&P 500's daily loss of 1.07% [1] - Over the past month, shares of Steel Dynamics have decreased by 8.02%, which is worse than the Basic Materials sector's loss of 0.56% and the S&P 500's loss of 7.03% [2] - The upcoming earnings disclosure is expected to show an EPS of $1.41, representing a 61.58% decline compared to the same quarter last year, with projected net sales of $4.17 billion, down 11.11% from the previous year [3] Annual Forecast - For the entire year, the Zacks Consensus Estimates predict earnings of $9.49 per share and revenue of $17.85 billion, indicating changes of -3.56% and +1.79%, respectively, compared to the previous year [4] Analyst Sentiment - Recent revisions to analyst forecasts for Steel Dynamics are important, as upward revisions indicate analysts' positive outlook on the company's business operations and profit generation capabilities [5] - The Zacks Rank system, which reflects these estimate changes, currently ranks Steel Dynamics at 3 (Hold), with a 5.41% increase in the Zacks Consensus EPS estimate over the last 30 days [6][7] Valuation Metrics - Steel Dynamics has a Forward P/E ratio of 13.16, which is a premium compared to the industry's average Forward P/E of 12.19, and a PEG ratio of 0.92, below the industry average PEG ratio of 1.04 [8] Industry Context - The Steel - Producers industry, part of the Basic Materials sector, holds a Zacks Industry Rank of 175, placing it in the bottom 31% of over 250 industries, indicating weaker performance compared to higher-ranked industries [9]

Core Insights - Steel Dynamics, Inc. (STLD) has provided earnings guidance for Q1 2025 in the range of $1.36 to $1.40 per share, compared to $1.36 in Q4 2024 and $3.67 in Q1 2024 [1] Group 1: Earnings and Operations - The company's steel operations are expected to be more profitable in Q1 2025 than in Q4 2024, driven by higher shipments that will offset some metal margin compression due to lagging contractual steel pricing [2] - Earnings from metals recycling operations in Q1 2025 are anticipated to be higher than in Q4 2024, supported by stronger realized prices and stable volumes for both ferrous and nonferrous materials [3] - Earnings from steel fabrication operations in Q1 2025 are expected to be lower than the previous quarter due to seasonally reduced shipments and a slight decline in realized prices, although order activity has improved [4] Group 2: Demand Drivers - Demand is being driven by sectors such as energy, non-residential building, automotive, and industrial, with increased domestic manufacturing investment and infrastructure programs expected to positively impact demand for various steel products [2][4] Group 3: Financial Actions - The board increased the Q1 2025 cash dividend by 9% to 50 cents per common share and authorized an additional $1.5 billion in share repurchases, following the exhaustion of the previous program [5] - As of March 12, 2025, STLD had repurchased $191 million, or 1%, of its common stock in Q1 [5] Group 4: Stock Performance - Shares of Steel Dynamics have declined by 10.8% over the past year, compared to a 17.7% decline in its industry [6]

Core Viewpoint - Steel Dynamics, Inc. anticipates first quarter 2025 earnings guidance between $1.36 and $1.40 per diluted share, a decrease from $3.67 per diluted share in the same quarter last year [1] Group 1: Earnings Guidance and Performance - The company's steel operations are expected to show stronger profitability in Q1 2025 compared to Q4 2024, driven by increased shipments that offset some metal margin compression [2] - Earnings from metals recycling operations are projected to be higher than Q4 2024 results due to stronger realized pricing and stable volumes for ferrous and nonferrous materials [3] - Earnings from steel fabrication operations are expected to decline compared to Q4 2024, attributed to seasonally lower shipments and a less than five percent decrease in realized pricing [4] Group 2: Demand and Production - Demand is being led by the energy, non-residential construction, automotive, and industrial sectors, with the Sinton Texas Flat Roll Division operating at over 90 percent production levels [2] - The order backlog for steel fabrication has improved, extending into Q3 2025, supported by increased order activity primarily from commercial, data center, manufacturing, warehouse, and healthcare sectors [4] Group 3: Capital Management - The board of directors increased the Q1 2025 cash dividend by nine percent to $0.50 per common share and authorized an additional $1.5 billion for share repurchases, following the exhaustion of the previous program [6] - As of March 12, 2025, the company repurchased $191 million, or one percent, of its common stock during the first quarter [6] Group 4: Future Developments - The company is progressing with the commissioning of its Columbus, Mississippi aluminum flat rolled products mill and expects to begin shipping material by mid-2025 [5]

Group 1: Steel Dynamics, Inc. (STLD) Financial Activities - Steel Dynamics has completed the sale of $600 million of 5.25% Notes due 2035 and $400 million of 5.75% Notes due 2055, with proceeds aimed at general corporate purposes and redeeming $400 million of 2.4% Senior Notes due in June 2025 [1] - The transaction aligns with Steel Dynamics' long-term strategy to establish a solid capital foundation for supporting personnel, customers, shareholders, and future growth [1][2] Group 2: Market Conditions and Demand Outlook - Steel Dynamics anticipates favorable market conditions to support rising demand across its operational platforms in 2025, with stabilized steel pricing and strong customer optimism [3] - The company believes that demand for domestically manufactured steel products with reduced carbon emissions will bolster future domestic steel prices [3] - Onshoring of manufacturing and significant public funding investments related to infrastructure and energy programs are expected to enhance the competitiveness of the domestic steel industry [3] Group 3: Competitor Insights - Nucor expects first-quarter 2025 earnings in steel mills and products to be comparable to the fourth quarter of 2024, while raw materials segment earnings are predicted to decline [4] - U.S. Steel forecasts first-quarter 2025 adjusted EBITDA between $100 million and $150 million, with a decline in the Flat-Rolled segment due to logistics constraints [5] - ArcelorMittal projects a 2.5% to 3.5% increase in world ex-China apparent steel consumption in 2025, supporting steel export growth despite near-term subdued demand [6]

Core Viewpoint - Steel Dynamics, Inc. has successfully completed the sale of $600 million of 5.250% Notes due 2035 and $400 million of 5.750% Notes due 2055, with net proceeds aimed at general corporate purposes, including the repayment of existing senior notes [1][2] Group 1: Financial Details - The company issued a total of $1 billion in notes, consisting of $600 million in 5.250% Notes due 2035 and $400 million in 5.750% Notes due 2055 [1] - The proceeds from the notes will be utilized for general corporate purposes, which may include the repayment of $400 million in 2.400% Senior Notes due June 2025 [1] Group 2: Strategic Intent - The transaction aligns with the company's long-term strategy to strengthen its capital foundation, supporting growth and maintaining investment-grade credit ratings [2] - The company emphasizes the importance of investment-grade ratings for accessing lower-cost and longer-term capital, enhancing financial strength and creating value [2] Group 3: Company Overview - Steel Dynamics is one of the largest steel producers and metals recyclers in North America, with facilities across the U.S. and Mexico [4] - The company produces a variety of steel products, including hot roll, cold roll, coated sheet steel, and structural steel, as well as liquid pig iron and scrap processing [4] Group 4: Underwriters - The offering of the notes was managed by J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, PNC Capital Markets LLC, BofA Securities, Inc., Wells Fargo Securities, LLC, and Truist Securities, Inc. [3]

Production Capacity and Operations - Steel Dynamics, Inc. has an estimated steelmaking and steel coating capacity of approximately 16 million tons and actual metals recycling volumes as of December 31, 2024[22]. - The company is nearing completion of a 650,000-metric ton recycled aluminum flat rolled products mill in Columbus, Mississippi, expected to begin shipments in mid-2025[35]. - The product mix from the new aluminum mill is projected to be approximately 45% sustainable beverage packaging, 35% automotive, and 20% common alloy and industrial use[35]. - The company has approximately 9.4 million tons of flat roll steel annual production capacity and an additional 2.0 million tons of flat roll steel processing capacity[67]. - Annual flat roll galvanizing capability is 5.5 million tons and painting capability is 2.0 million tons[67]. - The recycled aluminum flat rolled products mill in Columbus, Mississippi is expected to have an annual production capacity of 650,000 metric tons, with commercial production anticipated by mid-2025[152]. Financial Performance - Total net sales for 2024 were $17,540.39 million, a decrease of 6.68% from $18,795.32 million in 2023[305]. - Gross profit for 2024 was $2,802.59 million, down 30.73% from $4,045.88 million in 2023[305]. - Operating income decreased to $1,943.04 million in 2024, a decline of 38.36% compared to $3,151.18 million in 2023[305]. - Net income attributable to Steel Dynamics, Inc. for 2024 was $1,537.13 million, a decrease of 37.19% from $2,450.88 million in 2023[305]. - Basic earnings per share for 2024 were $9.89, down 32.67% from $14.72 in 2023[305]. - Total current assets decreased to $5,431.34 million in 2024, down 19.97% from $6,787.83 million in 2023[302]. - Total liabilities decreased to $5,989.99 million in 2024, a reduction of 1.29% from $6,068.89 million in 2023[302]. - Retained earnings increased to $14,798.08 million in 2024, up 9.26% from $13,545.59 million in 2023[302]. - Dividends declared per share increased to $1.84 in 2024, compared to $1.70 in 2023[305]. - Total assets slightly increased to $14,935.23 million in 2024 from $14,908.42 million in 2023[302]. - Net income for 2024 was $1,549,956, a decrease of 37.1% compared to $2,467,332 in 2023[311]. - Net cash provided by operating activities decreased to $1,844,503 in 2024 from $3,519,928 in 2023, reflecting a decline of 47.5%[311]. - Total cash and equivalents at the end of 2024 was $595,010, down from $1,406,464 at the end of 2023, representing a decrease of 57.7%[311]. Market and Sales - Over 70% of steel and steel fabrication sales are considered value-added, contributing to higher volume and profitability through varying market environments[28]. - In 2024, the company’s steel-consuming businesses purchased 1.7 million tons of steel from its steel mills, representing 14% of total steel shipments[31]. - Steel operations accounted for 69%, 67%, and 65% of consolidated net sales in 2024, 2023, and 2022 respectively[66]. - Export sales represented 6%, 8%, and 5% of steel segment net sales during 2024, 2023, and 2022 respectively[66]. - Sheet steel operations represented 72% of steel operations net sales in 2024, with 9.5 million tons produced[73]. - The company shipped 7,702,731 tons of sheet steel products from Butler, Columbus, and Sinton in 2024, an increase from 7,459,023 tons in 2023[74]. - Long products shipments totaled 1,625,913 tons in 2024, down from 1,851,349 tons in 2023[82]. - Steel fabrication operations accounted for 10%, 15%, and 19% of consolidated net sales during 2024, 2023, and 2022, respectively[100]. - The company sold 607,000, 663,000, and 856,000 tons of joist and deck products during 2024, 2023, and 2022, respectively[100]. - The company maintains approximately one-third of the total domestic steel joist and deck market for bookings, with approximately 1.7 million tons, 1.8 million tons, and 2.1 million tons during 2024, 2023, and 2022, respectively[102]. Sustainability and Environmental Initiatives - The company’s commitment to sustainability includes using EAF technology, which produces lower-carbon emission quality steel products[36]. - The company’s biocarbon production facility, projected to begin operations in the first half of 2025, aims for a 35% reduction in Scope 1 GHG absolute emissions[38]. - The company is committed to reducing its environmental footprint with specific GHG emission reduction goals for 2025, 2030, and 2050, which may involve additional capital expenditures[136]. - Increased environmental regulations and sustainability considerations may lead to higher operational costs and affect demand for the company's products[136]. - The company is subject to various environmental regulations and may incur significant cleanup costs related to hazardous waste management[145]. Workforce and Safety - Companywide team retention was approximately 79%, with U.S.-based teams retention of 89% in 2024[58]. - The company employs approximately 13,000 full-time team members as of December 31, 2024[54]. - Over 60% of a production team member's total potential compensation is "at risk" based on quality production and cost-effectiveness metrics[27]. - The company is focused on safety as its first core strategic pillar, aiming for zero injuries across operations[56]. - The company has a culture of trust and individual empowerment, fostering decision-making throughout the business[54]. Risks and Challenges - The company is significantly affected by global economic conditions, including potential recessions and slower than anticipated economic growth, which could adversely impact demand for its products[124]. - The steel industry is cyclical, and fluctuations in demand from key sectors such as construction, automotive, and manufacturing can lead to volatility in sales and profitability[130]. - Global steelmaking overcapacity currently exceeds consumption, leading to downward pressure on U.S. steel prices, which may adversely affect the company's financial performance[127]. - The company faces risks related to the creditworthiness of customers and suppliers, which can be exacerbated during periods of high interest rates, potentially leading to reduced sales and increased exposure to uncollectible accounts[126]. - The prices and availability of raw materials, particularly ferrous scrap, are subject to significant market fluctuations, which can constrain operating levels and reduce profit margins[131]. - The company is exposed to risks associated with energy costs and availability, which are subject to volatile market conditions and can disrupt production[135]. - The company may face challenges in passing on increased costs to customers, which could result in production slowdowns or curtailments[133]. - Cybersecurity threats pose risks to the company's sensitive data and operational capabilities, potentially leading to production delays and reputational harm[154]. - The company faces significant competition from other steel and aluminum producers, which may adversely affect its market share and financial condition[151]. - The availability of scrap supply is critical for the metals recycling operations, and any disruptions could negatively impact the company's results of operations[153]. Debt and Financial Management - As of December 31, 2024, total outstanding debt is $3,252,432, with a weighted-average interest rate of 3.6% for fixed-rate debt and 6.4% for variable-rate debt[271]. - The company has received notices from regulatory agencies identifying it as potentially responsible for cleanup costs at various disposal sites[149]. - The company is required to maintain certain financial covenants under its senior unsecured credit facility, which could limit operational flexibility[171]. - Impairment charges may adversely affect the company's results of operations if the fair value of assets falls below their recorded value[173]. - The company is exposed to interest rate changes, which could impact earnings and cash flows[270]. - The company has established effective internal control over financial reporting as of December 31, 2024, according to management's evaluation[280]. - The independent auditor confirmed the effectiveness of the company's internal control over financial reporting as of December 31, 2024[283]. - The consolidated financial statements present fairly the financial position of the company at December 31, 2024, in accordance with U.S. GAAP[292].

Company Performance - Steel Dynamics (STLD) closed at $133.48, showing no change from the previous day, while the S&P 500 gained 0.01% [1] - Over the past month, shares of Steel Dynamics have appreciated by 5.06%, outperforming the Basic Materials sector's gain of 0.67% and the S&P 500's loss of 2.26% [1] Upcoming Earnings - The upcoming earnings disclosure is anticipated, with an expected EPS of $1.64, reflecting a 55.31% decline compared to the same quarter last year [2] - Revenue is projected to be $4.14 billion, down 11.81% from the prior-year quarter [2] Annual Forecast - For the entire year, earnings are forecasted at $9.01 per share and revenue at $17.47 billion, indicating changes of -8.43% and -0.41% respectively compared to the previous year [3] Analyst Estimates - Recent adjustments to analyst estimates for Steel Dynamics are noteworthy, as they often indicate changing near-term business trends [4] - Positive estimate revisions are viewed as a sign of optimism regarding the company's business outlook [4] Zacks Rank and Valuation - The Zacks Rank system, which integrates estimate changes, currently ranks Steel Dynamics at 3 (Hold) [6] - The Forward P/E ratio for Steel Dynamics is 14.82, which is a premium compared to the industry average of 12.83 [7] PEG Ratio - Steel Dynamics has a PEG ratio of 1.04, which is lower than the average PEG ratio of 1.16 for Steel - Producers stocks [8] Industry Ranking - The Steel - Producers industry ranks in the bottom 14% of all industries, with a current Zacks Industry Rank of 216 [9]