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Mar. 16, 2015, 5:19 PM
- Steel stocks (NYSEARCA:SLX) finished mostly lower after a WSJ weekend report on increasing Chinese steel exports and an analyst note that lowered price targets on the sector.
- WSJ said China's steel exports rose 63% Y/Y to 9.2M tons in January, and that as China's growth slows it is shipping its excess steel overseas, resulting in lower prices and prompting steel producers all over the world to seek government protection.
- Also, Jefferies cut price targets on several sector names after what it sees as a challenging Q1, noted that most of its contacts expect steel prices to trough sometime in Q2, and said it believes mini-mill producers such as Steel Dynamics and Nucor are best positioned in the group.
- In today's trade, X +0.7%, NUE +1.1%, STLD +0.1%, AKS -1.5%, WOR -2.3%, CMC -3%, SCHN -4.7%.
Mar. 12, 2015, 12:59 PM
- U.S. Steel (X +0.9%) says it will temporarily idle a portion of its Minnesota Ore Operation, effective May 13, citing current inventory levels and the ongoing adjustment of the company's steelmaking operations throughout North America to match customer demand.
- The idling affects 412 employees at the company's Keetac plant in Keewatin, Minn., two months after laying off ~750 employees at two plants in Texas and Ohio.
- U.S. Steel says it routinely adjusts its production to account for the demand reflected in market fluctuations, but 24/7's Chris Lange asks, "Is it fair to ask if this is less like a fluctuation and more like a tailspin?"
Mar. 3, 2015, 9:09 AM
- U.S. Steel (NYSE:X) -2% and AK Steel (NYSE:AKS) -3.7% premarket after Nomura downgrades each stock to Neutral from Buy, with respective price targets of $21 (lowered from $37) and $4 (cut from $10).
- The firm sees two major structural changes underway that should significantly alter the global steel landscape in the coming years: dollar strength and cost curve deflation driven by lower raw material prices and freight rates.
- Flat-rolled and long product import pressure have been significant headwinds for the industry over the past year, and Nomura expects further dollar appreciation into 2016 will keep import pressure high.
Feb. 26, 2015, 5:27 PM
- U.S. steelmakers are slashing prices to cope with a flood of imports juiced by the strong dollar, a move that will pressure their profit margins and reduce costs for buyers of steel, WSJ reports.
- Imports rose 33% Y/Y in January, according to new figures from the American Iron and Steel Institute, reaching 3.85M tons vs. 2.9M a year earlier; to stem the tide, steelmakers with major U.S. operations such as ArcelorMittal (NYSE:MT), U.S. Steel (NYSE:X) and Nucor (NYSE:NUE) have cut prices in recent weeks, according to steel distributors who buy from them.
- The benchmark hot-rolled coil index is down 17% YTD to ~$500/ton, its lowest level since August 2009.
- The lower steel prices are good news for makers of cars and car parts, construction companies and other major buyers of steel (NYSEARCA:SLX).
Feb. 18, 2015, 2:58 PM
- U.S. Steel (X -2.1%) is the most compelling story in the steel and iron ore sector, and remains a top pick on a one- to three-year view, Credit Suisse says, noting that historical conceptions about the profitability of the business become irrelevant when management is operating these assets under a fundamentally different operating strategy - for profits rather than for volumes.
- Also, in the absence of valuation and earnings support, Cliffs Natural Resources (CLF +0.8%) has become a long-dated commodity-price option, Credit Suisse says, and as such, it should trade at a higher multiple than the average coal company; applying, say, a 20x multiple to CLF's ~$300M 2015 EBITDA "implies an equity value of over $20/share (or at least something significantly higher than today’s share price)."
Feb. 6, 2015, 12:34 PM
- Wells Fargo’s Sam Dubinsky recommends shorting U.S. Steel (X +0.4%) and buying Steel Dynamics (STLD +1.1%) because of how the companies can hold up against declining U.S. scrap metal prices.
- Dubinsky says STLD and X are both trading at 7x EBITDA at $500/ton hot-rolled steel, but believes STLD has a better balance sheet, leaner cost structure and no oil country tubular goods exposure, which could be a greater than anticipated headwind for U.S. Steel; if steel pricing proves worse than forecast, STLD is simply a safer play.
- The analyst also estimates Nucor (NUE +2.4%) is trading near 8.5x EBITDA, while AK Steel (AKS +2.9%) is at 14x.
Feb. 5, 2015, 3:11 PM
- U.S. Steel (X -3.4%) is maintained with a Buy rating at Argus, but the firm cuts its target price to $32 from $53 based on its lower 2015 earnings forecast and prospects for significantly weaker performance in the tubular segment.
- Management noted following Q4 earnings that tubular sales and earnings would be hurt by the sharp decline in oil prices as E&P companies cut back on purchases of drill pipe, but Argus thinks the weaker outlook already is factored into the share price following the post-earnings selloff.
- The firm says its revised $32 target implies a multiple of 13.6x its 2016 EPS estimate, still near the low end of the historical range.
Feb. 3, 2015, 6:58 PM
- Cliffs Natural Resources (NYSE:CLF) plans to join steelmakers in filing complaints over steel imported into the U.S., CEO Lourenco Goncalves says, a move that could raise pressure on the U.S. government to add more tariffs on steel products.
- CLF has been restructuring to focus on five profitable iron ore mines in Minnesota and Michigan that sell exclusively to U.S. Steel (NYSE:X), ArcelorMittal (NYSE:MT) and other steelmakers with U.S. mills, and those mines are now vulnerable to the sudden slide in steel prices.
- Goncalves blames the "avalanche of imports" for collapsing steel prices, not falling oil prices, even though energy companies have been canceling orders for steel pipe as they cut back on new projects.
Jan. 29, 2015, 2:08 PM
- United States Steel (NYSE:X) declares $0.05/share quarterly dividend, in line with previous.
- Forward yield 0.9%
- Payable March 10; for shareholders of record Feb. 11; ex-div Feb. 9.
Jan. 28, 2015, 12:44 PM
Jan. 28, 2015, 12:17 PM
- U.S. Steel (X +13.5%) soars the day after its Q4 earnings crushed expectations and reporting a strong quarter and year despite extreme headwinds, providing confidence that it can handle whatever 2015 brings.
- Although the company warned that low oil prices and the strong U.S. dollar could negatively impact its business in 2015, it said the potential for higher consumer spending could help lift demand.
- Credit Suisse calls it “another impressive quarter within the context of a challenging operating environment” but maintains a Market Perform rating and $31 price target on the stock.
- UBS keeps its rating at Neutral but cuts its price target to $25 from $32, saying X's competitive position worsens as imports ramp up, oil capex falls and iron ore prices weaken while conceding that guidance provides some validation that the Carnegie project is delivering more sustainable operating profit than in the past (Briefing.com).
- Cowen maintains an Outperform rating and $40 target.
Jan. 28, 2015, 9:14 AM
Jan. 27, 2015, 5:35 PM
Jan. 27, 2015, 4:37 PM
- United States Steel (NYSE:X): Q4 EPS of $1.82 beats by $0.95.
- Revenue of $4.07B (-4.7% Y/Y) beats by $110M.
- Shares +2%.
Jan. 26, 2015, 6:10 PM
- U.S. Steel (NYSE:X) says it will temporarily curtail operations at two plants in Alabama and one in Texas that sell steel pipes and tubular products to oil and gas drillers, potentially affecting more than 1,900 workers.
- Earlier this month, U.S. Steel said it would idle plants in Ohio and Texas, and possibly lay off up to 756 workers.
- The fall in oil prices could decimate an entire industry that has been built up in recent years to supply drilling in places such as the Marcellus Shale and the Gulf of Mexico; “There’s still millions of tons of capacity set to come online, and it’s just going to be too much," says one analyst.
- Other steelmakers with key U.S. operations include NUE, STLD, MT and AKS.
Jan. 26, 2015, 5:35 PM
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