Citi Maintains 'Buy' Rating on Nucor (NUE), Sees Positive for STLD, GNA and CMC

September 4, 2008 9:57 AM EDT

Citi maintains 'Buy' rating on Nucor Corp (NYSE: NUE). Price target $90.

Citi analyst says, "Steel equities have been punished amid the China slowdown and Crude-induced exodus from commodities. Yet, underlying Steel markets are far more solid. Spot Sheet prices may have topped out, but company realizations should climb into 2009, while Beam/Bar/Plate remain at or near records. Incremental crude Steel costs suggest a floor of +$900/s.ton...Thus, our positive view on NUE is not tied to prophesies of China/macro salvation or imminent Steel price levitation, but rather to favorable company-specific product mix and margin structure. As a result we see upside to 3-4Q EPS while maintaining above-consensus 2009-10. A positive preannouncement is likely. This dynamic also helps Steel Dynamics (Nasdaq: STLD), Gerdau AmeriSteel (NYSE: GNA), and Commercial Metals (NYSE: CMC)."

Nucor Corporation is engaged in the manufacture and sale of steel and steel products.

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