Steel Stock Stumbles on Guidance Gaff

Cowen chimed in with a bear note

Deputy Editor
Dec 18, 2020 at 12:19 PM
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United States Steel Corporation (NYSE:X) is down 5.4% at $17.56 this afternoon, following the company's fourth-quarter forecast of losses of 85 cents per share, which came in lower than analysts' estimated 57 cents per share loss. Cowen chimed in, lowering its price target to $15 from $18.56, warning against some of the steel manufacturer's risks, including changes in fragile supply and demand balance, a volatile global economy, and trade restrictions. 

Today's dip has X set to close back below its 10-day moving average for the first time since early November, though the 20-day still sits directly  below as potential support. While the equity has taken a breather since hitting a fresh annual high of $20 last week, it still sports a 54% year-to-date gain, and an impressive nine-month lead of 234%.

Circling back to analyst attention, the brokerage bunch isn't convinced by X's recent rally. The equity sports just one "strong buy" rating, compared to eight "hold" or worse ratings. Additionally, the 12-month consensus price target of $10.45 is a 40.6% discount to current levels. 

Short interest, meanwhile, has been rolling over, down 5.1% in the last reporting period. The stock is still heavily shorted, with these bearish bets making up 21.2% of its available float. Should more of these bearish bets begin to unwind, a short squeeze could put some wind at the equity's back. 

 

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