Berenberg Downgrades Nucor (NUE) to Hold Citing Valuation after Sharp Rally
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Berenberg downgraded Nucor (NYSE: NUE) from Buy to Hold with a price target of $61.00 on valuation following the sharp rally.
Analyst Alessandro Abate commented, "After a sharp rally (+20.5%) since our upgrade note (Nucor: good entry point as steel prices rise; up to Buy dated 1 November), we now downgrade to Hold. While our 2017E price target rises to $61 (from $57), on the back of our EBITDA and EPS now at $2.62bn (+4.9%) and $3.16 (+7.4%), on our more optimistic view of both US structural steel and plate, the limited upside (5.9%) might trigger profit taking. In the long term, however, we see the stock as a great beneficiary from potential US infrastructure spending, given its exposure to the construction and energy sectors. In the short term, though, we believe that the now significantly less appealing risk/reward ratio will justify our downgrade."
Shares of Nucor closed at $58.75 yesterday.
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