Nomura Securities Lifts Target on Nucor (NUE) On Cost Leadership and Volume Recovery

January 30, 2013 1:14 PM EST
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Price: $60.06 -1.52%

Rating Summary:
    12 Buy, 12 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Nomura Securities raised its price target on Buy-rated Nucor (NYSE: NUE) from $48 to $56 and reiterated its Buy rating following Q4 results.

"Cost leadership and volume recovery key to NUE thesis. We believe Nucor (NUE) should start to see more significant metal margin expansion as acceleration in long products demand and a lower input cost position (relative to integrated producers and absolute versus 2012) yield benefits," analyst Curt Woodworth notes. "NUE’s planned DRI plant coupled with generally low scrap prices and other cost reduction efforts should allow the company to capitalize on a late-cycle volume recovery story to materialize in 2H 2013 as commercial construction picks up. The seasonality impact for NUE is likely to be low as investors are focused on 2014 EPS potential when the full-scale benefits of DRI and higher utilization rates flow through. We believe NUE remains undervalued given its strong volume growth outlook as the late-cycle commercial construction markets recover over the 2013-15 time frame."

The firm trimmed FY13E EPS estimates from $2.80 to $2.70 and FY14E EPS is at $3.50.

For an analyst ratings summary and ratings history on Nucor click here. For more ratings news on Nucor click here.

Shares of Nucor closed at $47.04 yesterday.

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