Steel Stock Stumbles on Guidance Gaff

Cowen chimed in with a bear note

Digital Content Manager
Dec 18, 2020 at 12:19 PM
facebook twitter linkedin

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. 



Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners