UBS Downgrades Nucor (NUE) to Neutral

UBS analyst Curt Woodworth downgraded Nucor (NYSE: NUE) from Buy to Neutral, PT $183.00 (from $168.00).

The analyst comments "We downgrade NUE to Neutral (from Buy) and raise our PT to $183 (+9%). NUE shares are up +32% since mid-Oct (vs STLD +23%), despite a soft 4Q (note), largely on the back of strong price moves in flat & longs (+19%/7% HRC/rebar) & ~$130/st in announced plate increases (SSAB/Oregon Steel Mills). Our higher PT is largely a function of mark to market pricing (Figure 12US telPric DekChangs SiceLast Upde). However, given domestic price action & based on our all-in import parity calcs (Figure 4Estimaed sprfoUS HRCimports fmkeyiport desinato @50%S23 Tarifs), we estimate lower cost imports (SE Asia, Brazil) became economic in mid-Oct. Given the time lag to import (~3m; Figure 2~3m LagedImport ac(m)F3 LagedImport ac(m), we expect imports to add supply from Feb onwards. With supply reentering the market & ongoing S232 carve out risk, including USMCA renegotiation (joint review 1 July), we see downside risk to US HRC in 2026 (UBSe ~$876/st vs spot ~$950/st). With near term pricing capped in our view & NUE trading ~8.2x NTM EV/EBITDA, +0.7x above 3-yr, & recently touching ~10y highs (Nov 2016: ~8.8x), we downgrade to Neutral."

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 $173.58 yesterday.

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