It's Time to Buy the Steel - Analyst
Tweet
Share
E-mail
Get Alerts X Hot Sheet
Price: $54.84 --0%
Rating Summary:
9 Buy, 17 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 11 | New: 27
Rating Summary:
9 Buy, 17 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 11 | New: 27
Join SI Premium – FREE
United States Steel Corp. (NYSE: X) is trading higher today, but according to one analyst the upswing may have just started for the company and its peers.
JPMorgan's Michael Gambardella thinks steel and steel company stock prices will likely move higher in the short-term, both for fundamental and psychological reasons.
Fundamentally, Gambardella notes that scrap supply tends to tighten in the winter months and push both steel and stock prices higher. Psychologically, as year-end nears, "investors tend to mentally write off the stocks' previous twelve month performance and establish ranges for what companies could earn in a more normalized environment and where stocks would trade on those earnings,” he said.
Given the cyclical nature of the steel industry, just a modest improvement in sentiment could move perceptions of potential earnings for 2012 sharply higher. That said, Gambardella doesn't see a stained move higher until the nonresidential construction market stages some form of a recovery.
Shares of United States Steel are up 2.7 percent, Nucor (NYSE: NUE) is up 0.5 percent, and AK Steel (NYSE: AKS) is up fractionally.
JPMorgan's Michael Gambardella thinks steel and steel company stock prices will likely move higher in the short-term, both for fundamental and psychological reasons.
Fundamentally, Gambardella notes that scrap supply tends to tighten in the winter months and push both steel and stock prices higher. Psychologically, as year-end nears, "investors tend to mentally write off the stocks' previous twelve month performance and establish ranges for what companies could earn in a more normalized environment and where stocks would trade on those earnings,” he said.
Given the cyclical nature of the steel industry, just a modest improvement in sentiment could move perceptions of potential earnings for 2012 sharply higher. That said, Gambardella doesn't see a stained move higher until the nonresidential construction market stages some form of a recovery.
Shares of United States Steel are up 2.7 percent, Nucor (NYSE: NUE) is up 0.5 percent, and AK Steel (NYSE: AKS) is up fractionally.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Nvidia pitches Vera CPU to Chinese clients with August delivery target
- Citi upgrades AMD to buy with $575 price target ahead of Q4 earnings
- 51Talk Online Education Group (COE) Reports Q1 EPS of $0.00
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
JPMorgan, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
