Expect a pullback in AK Steel, US Steel, Nomura says

|About: AK Steel Holding Corp (AKS)|By:, SA News Editor

The big rally in steel stocks like AK Steel (AKS -1%), US Steel (X -1.3%) and Steel Dynamics (STLD +1.4%) can be explained in part by better steel and company fundamentals, but they also reflect a dose of over-optimism, Nomura says in suggesting investors now on the sideline wait for a better entry point.

Following the strong sector run, the firm foresees equity price weakness into Q2 as sheet and scrap/iron ore values correct, which it would then view as a better entry point for the integrated steel names.

Nomura's bias on the group remains positive, and believes particularly AKS and X are becoming more broadly “investable.”