Nomura Securities analyst Curt Woodworth reiterated a Neutral rating and $20 price target on Steel Dynamics (NASDAQ: STLD) following Q1 results, calling the quarter okay but metal spreads at risk in Q2.

"We remain concerned by ongoing deterioration in both long and flat product prices against a backdrop of recovering US scrap values, as we believe minimills’ metal spreads are at risk of further q/q compression into 2Q15 amidst elevated imports and continued cost down within global steel export markets. While STLD’s 1Q15 results were slightly above Nomura and consensus expectations following a weak negative preannouncement in March, we believe the market will be focused more on the rationale behind management’s toned down qualitative guidance for 2Q in which STLD now expects a recovery later in the quarter than it did only a month ago. We are reducing our 2015 estimates for STLD to reflect recent spot prices weakness and scrap stability. We now estimate 2015 EBITDA of $724mm, down from $751mm previously and below current consensus of $916mm. We reiterate our Neutral rating and $20 PT, which represents 7.3x 2016E EV/EBITDA."

The firm lowered FY15E EPS from $0.80 to $0.75; FY16E EPS from $1.55 to $1.40.

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Shares of Steel Dynamics closed at $20.88 yesterday.