BofA on Steel Dynamics (STLD): 'free cash flow (FCF) should inflect meaningfully'

BofA Securities analyst Lawson Winder reiterated a Buy rating and $195.00 price target on Steel Dynamics (NASDAQ: STLD).

The analyst comments "Steel Dynamics (STLD) guided to Q1’26 EPS of $2.73 - $2.77, below Bloomberg / Visible Alpha (VA) consensus of $3.24/$3.27. The guide was also modestly lower than BofAe at $3.01, with the miss due to slightly reduced Steel Fabrication segment profitability and potentially lower steel mill shipments due to severe winter weather in Jan./Feb. Buybacks slowed on higher cash use, but normal share repurchases to resume from Q2. Looking ahead, STLD should benefit from continued margin expansion in flat-rolled products in Q2, higher fabrication volumes (with backlogs up 35% YoY and extending well into Q3’26) and improved Aluminum segment performance. STLD sees demand remaining strong across several key end markets. The Aluminum mill startup is progressing well, with the first of the two CASH lines (to produce finished automotive products) in commissioning. With the Aluminum mill ramp-up and capex trending lower, STLD's free cash flow (FCF) should inflect meaningfully (though potential M&A could alter this), allowing for improved capital returns in 2026, in our view. Maintain Buy rating."

For an analyst ratings summary and ratings history on Steel Dynamics click here. For more ratings news on Steel Dynamics click here.

Shares of Steel Dynamics closed at $174.28 yesterday.

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