Does This Steel Stock Have Room to Run?

Despite NUE's 2021 gains, analysts remain unconvinced

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Steel stocks --big winners of 2021 already -- are in focus today, after the lackluster economic data out of China weighed on the materials sector. Nucor Corporation (NYSE:NUE) is not exempt from today's struggles, last seen down 2.6% to trade at $122.86. But today's price action is a nice excuse to take a deep dive into the iron & steel stock. 

Nucor stock has recently scored an all-time high of $128.81 on Friday, August 13. The shares are up 130% in 2021, with a mid-summer breather contained by their 100-day moving average. Moreover, Nucor Corporation offers a forward dividend of $1.62 and a dividend yield 1.28%.

NUE Stock Chart

Despite the stock's outsized gains in 2021, five of six analysts sit on the sidelines with tepid "hold" ratings. In other words, NUE is overdue for a round of upgrades that could vault the stock back toward its record peak.

Overall, Nucor stock still has strong potential as a value play, even after NUE's big upward move this past year. NUE currently trades at a great price-earnings ratio of 12.58 and has an even more attractive forward price-earnings ratio of 6.87. Nucor’s biggest fundamental concern is its inconsistent top- and bottom-line growth. Nucor experienced back-to-back years of significant revenue and net income declines in fiscal 2019 and fiscal 2020. Nonetheless, the general trajectory of Nucor's growth is positive, with NUE's revenues and net income up by 27% and 131%, respectively, since 2017.

 

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