Bull of the Day: Nucor (NUE)

Nucor (NUE) , is a Zacks Rank #1 (Strong Buy) and the largest U.S. steel producer, operating scrap-fed electric arc furnace mills nationwide.

The company topped Q3 estimates on record shipments and a sharp pricing rebound, driving shares to all-time highs. With the CEO calling demand the strongest in 31 years, the outlook remains bullish.

About the Company

Based in Charlotte, North Carolina, Nucor operates through three segments. Steel mills are its earnings engine, while steel products include joists, decking, rebar fabrication and building systems. Raw materials cover scrap recycling and direct reduced iron.

The company is valued at $62 billion and has a Forward PE of 12. The stock has Zacks Style Scores of “C” in Value, “B” in Growth, and “B” in Momentum. Nucor has paid 214 consecutive quarterly dividends, with its current $0.56 payout scheduled for November 10.

Earnings Beat

Nucor delivered a strong third quarter, with EPS of $5.80 topping estimates and more than doubling year over year. Revenue reached $11.25 billion, while adjusted EBITDA climbed to $2.28 billion. Mill utilization was 89%, reflecting strong production levels.

The downstream steel products business was the standout, as pricing finally caught up with higher input costs. Segment pricing rose 7% sequentially, expanding EBITDA margins by approximately 200 basis points.

Management expects fourth quarter earnings to be in line with or modestly above Q3, as higher pricing offsets fewer shipping days and planned outages. Full-year steel mill shipment growth is now expected toward the upper end of its 5% to 10% range, with the CEO anticipating a financially stronger 2027.

Demand remains broad-based across heavy equipment, energy, manufacturing, defense and digital infrastructure. Automotive sheet shipments are up 4% despite flat North American vehicle production, while a new GM SUV contract marks a win in a market traditionally dominated by integrated mills.

Nucor Corporation Price, Consensus and EPS Surprise

Nucor Corporation price-consensus-eps-surprise-chart | Nucor Corporation Quote

Growth Projects Ramping

Nucor's West Virginia sheet mill remains on time and budget, with first coils expected by December and utilization targeting 50% by year-end 2027. Its new 500,000-ton automotive galvanizing line in Berkeley began production in October, targeting 50% utilization by Q2 2027 and full run rate by year-end.

The company generated $2.7 billion in free cash flow through the first nine months and returned nearly $1.4 billion to shareholders. Capital spending should fall from roughly $2.5 billion in 2026, supporting stronger cash generation in 2027.

Nucor targets returning at least 40% of net earnings to shareholders and will return excess cash when attractive growth opportunities are unavailable.

Estimates Are Rising

Analysts earnings estimates are going higher across the board.

For the current quarter, estimates have been taken from $4.52 to $5.62 over the last 90 days. That’s a jump of 24%.

For the current year, we see a move of 10% higher over that same time frame, with numbers going from $17.86 to $19.61. And the momentum continues for next year, with estimates up 16% over the last 90 days.

Price targets are going higher as well, with Wells Fargo hiking to $305, Barclays to $320 and JP Morgan at $304. Goldman Sachs reiterated its Buy rating, lifting its price target to $335 from $302.

The Technical Take

Since March, the stock has been very strong moving from the $160 area to an all-time high of $287 this week. Investors will now look if there is follow through higher or if a pullback is warranted.

For those looking for entries into the name, let’s look at those moving averages:

21-day: $261

50-day: $256

200-day: $225

In Summary

Nucor has a powerful combination of catalysts: record shipments, expanding downstream margins, major growth projects coming online and strong demand across data centers, infrastructure and manufacturing.

With capital spending set to decline,free cash flow poised to climb and the CEO expecting an even stronger 2027, this Zacks Rank #1 (Strong Buy) steel leader has plenty of room to keep building on its momentum.

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This article originally published on Zacks Investment Research (zacks.com).

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