Nucor Stock Holds Steady As Q4 Profit Set To Plunge On Weak Steel Demand: Retail Braces For Impact

synopsis

Nucor Corp. (NUE) shares edged 0.2% lower in mid-day trading on Friday as investors awaited the company’s fourth-quarter earnings report, due after the market close. 

The steelmaker is expected to report earnings per share (EPS) of $0.62 on revenue of $6.76 billion, marking a 12.7% decline from the same period last year, according to Koyfin data.

Net profit for the December quarter is forecast to plummet over 80% to $139 million as weakening steel prices and softer end-market demand weigh on the company’s performance.

JPMorgan recently trimmed its price target on Nucor to $152 from $168, reiterating an ‘Overweight’ rating ahead of the earnings release. 

In a research note cited by The Fly, the investment bank flagged "downbeat" market commentary as a potential headwind but noted optimism around seasonal inventory restocking and favorable trade policies that could benefit North American steelmakers in the coming quarters.

Nucor has also been drawn into speculation about a potential collaboration with Cleveland-Cliffs (CLF) to pursue a joint acquisition of U.S. Steel (X). 

Since the company has neither confirmed nor denied the rumors, investors will be watching closely for any updates about the possible consolidation of the steel industry.

Nucor Sentiment and Message Volume on Jan.27 as of 1:10 p.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment for Nucor dipped to ‘bearish’ on Tuesday afternoon, from ‘neutral’ three months ago. However, message volume spiked ahead of the earnings to ‘extremely high’ levels. 

One user expressed cautious optimism, increasing their position in Nucor citing the company's long-term resilience despite Wall Street’s near-term forecasts.

Nucor's stock is expected to move about 4.3% – around $5.26 per share – after its earnings report, based on options trading data reported by TheFly. 

The volume of call options is higher than put options, at a ratio of 11:2, which means that more investors are betting on the stock going up, rather than down. 

Historically, the stock has moved an average of 6.5% after earnings over the past two years.

U.S. steel prices saw a sharp decline in 2024 due to a slowdown in end-market demand after a strong run in late 2023 that extended into early last year.

Nucor’s stock has dipped by over 30% in the last year, with half of that drop occurring in the last three months. Despite this, the stock is up nearly 4% year-to-date.

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