Nomura Securities Upgrades Nucor (NUE) to Buy

Nomura Securities upgraded Nucor (NYSE: NUE) from Neutral to Buy with a price target of $47.00 (from $45.00).

Analyst Alexander Burnes commented, "Similar to STLD, we see EBITDA and cash flow inflecting higher in 1H16, supported by moderate upside to steel prices as both destocking and import pressure starts to fade, combined with sustained pressure on raw materials costs via seaborne scrap values. While NUE has a slightly stronger balance sheet than STLD and thus more potential for strategic growth through the current downturn, NUE’s exposure to the plate markets remains a concern. However, we expect additional long product volume growth to offset this. Completion of the Louisiana DRI facility should also be a tailwind heading into 2016, despite reduced economic benefit of the product in the current market. Our $47 TP represents 8.4x 2016E EV/EBITDA, which reflects a peak multiple applied to what we believe will mark trough-cycle earnings in 2015/16."

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 $39.99 yesterday.

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