On Tuesday, Citi reaffirmed its Buy rating and $240.00 stock price target for Nucor Corporation (NYSE:NUE), following the steelmaker's first-quarter earnings report. The company's earnings per share (EPS) of $3.46 fell slightly short of the projected range of $3.55 to $3.65, marking a rare occurrence for the typically conservative Nucor. The slight miss was attributed primarily to discrepancies in intercompany eliminations versus operating results.
Nucor's earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $1.5 billion, which was 3% below Citi's expectations. The Mills segment performed well, but the Steel Products division did not meet forecasts. Notably, this quarter saw the weakest shipments of Joist & Deck since 2015, which could potentially affect Steel Dynamics , Inc. (NASDAQ:STLD) shares.
The company experienced negative free cash flow due to a significant working capital draw, yet it still maintains a balance sheet with more cash than debt. Nucor intends to continue its share buyback program and remains open to strategic mergers and acquisitions.
Despite these positive indicators, the guidance for the second quarter of 2024 anticipates lower results, aligning with expectations of decreased sheet and plate prices.
The market's reaction to Nucor's earnings report is expected to be subdued due to the earnings miss and forward-looking statements. The company has scheduled a conference call for investors at 10 AM Eastern Time on April 23, 2024, to discuss the quarterly results and provide further insights into its performance and strategy.
InvestingPro Insights
In light of Nucor Corporation's recent earnings report and the market's anticipated response, several InvestingPro Tips and real-time metrics offer additional context for investors considering the company's stock. Nucor's management has been actively repurchasing shares, signaling confidence in the company's value.
Moreover, Nucor has a commendable track record of raising its dividend for 14 consecutive years, underscoring its commitment to shareholder returns. These actions align with the company's robust financial health, as indicated by a strong free cash flow yield and the ability to comfortably cover interest payments with its cash flows.
From a data perspective, Nucor's market capitalization stands at $42.58 billion, and it currently trades at a price-to-earnings (P/E) ratio of 10.44, which is slightly lower than the adjusted P/E ratio for the last twelve months as of Q1 2024 at 10.14.
Although revenue has seen a decline of 14.07% over the last twelve months as of Q1 2024, the company's gross profit margin remains healthy at 21.58%. These financials are complemented by a six-month price total return of 37.2%, reflecting a significant uptick in stock price over a relatively short period.
For investors interested in a deeper dive into Nucor's financials and strategic positioning, there are 15 additional InvestingPro Tips available at https://www.investing.com/pro/NUE. To access these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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