Nucor(NUE) ZACKS·2025-03-19 15:10Core Viewpoint - Nucor Corporation (NUE) is currently facing a bearish trend in its stock performance, trading below key moving averages and experiencing significant price declines due to challenges in the steel industry [1][4][12]. Stock Performance - NUE stock has declined by 32.9% over the past year, underperforming the Zacks Steel Producers industry's decline of 19.4% and the S&P 500's increase of 9.1% [4]. - The stock is approximately 36% below its 52-week high of 4.1 billion in cash and short-term investments, and generated cash from operations of roughly 2.7 billion to shareholders through dividends and share repurchases in 2024, totaling around 6.5 billion in eight major growth projects through 2027, including significant expansions in sheet and rebar production [8]. - Recent acquisitions, such as Southwest Data Products and Rytec Corporation, are aimed at diversifying its product offerings and enhancing cross-selling opportunities [9]. Market Challenges - A significant decline in U.S. steel prices, dropping over 40% from $1,200 per short ton at the start of 2024, has negatively impacted Nucor's profitability [13]. - The slowdown in global automotive production and high interest rates have further curtailed steel demand in key markets, including construction [14]. Valuation and Earnings Outlook - Nucor is currently trading at a forward 12-month earnings multiple of 14.79X, which is about 35% higher than the peer group average of 10.97X [17]. - The Zacks Consensus Estimate for NUE's 2025 earnings has been revised upward, although the first quarter estimate has seen a downward revision [18]. Conclusion - Nucor's strategic initiatives to expand production capabilities and diversify through acquisitions are positive, but the company remains vulnerable to ongoing challenges in the steel industry [19].