Nucor (NUE) PT Lowered to $129 at CFRA

CFRA analyst Matthew Miller lowered the price target on Nucor (NYSE: NUE) to $129.00 (from $131.00) while maintaining a Sell rating.

The analyst comments "We decrease our 12-month target by $2 to $129, which assumes NUE will trade at an EV/EBITDA of 6.8x our 2025 EBITDA estimate. This is a premium to NUE's three-year average forward EV/EBITDA of 6.3x but a discount to peers, which are trading at an average forward EV/EBITDA of 7.7x. Steel producers are trading at a premium to the industry's historical average. We think this reflects an unrealistic expectation for much higher steel prices and earnings returning to the peaks from 2021 and 2022. We lower our 2024 EPS estimate by $0.07 to $9.02 and 2025's by $1.17 to $10.05. NUE posted Q3 adj. EPS of $1.49 vs. $4.57 in the prior-year period, $0.08 above consensus, driven by a top-line beat of 3%. Total tons sold during Q3 declined 1% Y/Y and sequentially. The Q3 average sales price per ton fell 6% Q/Q and was down 15% Y/Y. We have concerns about recent downward trends in the domestic steel mill utilization rate amid the overhang of overcapacity, combined with more capacity coming on stream in the next few years."

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