Nucor, Steel Dynamics, Commercial Metals Stocks Slip On UBS Downgrade: Retail Still Upbeat

Shares of U.S. steelmakers Nucor Corp. (NUE), Steel Dynamics Inc. (STLD), and Commercial Metals Co. (CMC) fell sharply in early Thursday trading after UBS downgraded the stocks, citing weak third-quarter earnings and disappointing guidance across the sector. 

Shares of all three companies fell over 3% as markets opened. 

UBS highlighted persistent volume and pricing pressures, despite optimism for a recovery in steel demand and prices by 2025, buoyed by potential tailwinds from President-elect Trump's protectionist policies.

Nucor was downgraded to ‘Neutral’ from ‘Buy’ with its price target cut to $156 from $171 as UBS sees downside risk over the next two quarters.

Retail sentiment around Nucor improved to ‘bullish’ from ‘neutral’ despite UBS’ ‘neutral’ rating  with chatter increasing to ‘extremely high’ levels.  The stock has booked losses of 23% so far this year. 

Meanwhile, Steel Dynamics was downgraded to ‘Neutral’ from ‘Buy’ but its price target was raised to $149, up from $145.

Retail sentiment around the stock remained ‘Neutral’, and message volumes were subdued at ‘normal’ levels.

Despite "weak" results third-quarter results and "disappointing" demand data, Steel Dynamics shares are up over 25% from the September lows, the brokerage said in its research note. 

Unlike Nucor, Steel Dynamics is up 8% so far this year. 

Lastly, Commercial Metals faced the most bearish outlook, downgraded to ‘Sell’ from ‘Buy’ with a price target of $56, down from $62.

Retail sentiment around the stock has improved dramatically over the past week to ‘bullish’ from ‘extremely bearish’ while chatter has remained at ‘high’ levels. 

UBS pointed out Commercial Metals has held onto most of the post-election gains despite being hit with a $330M court ruling.

The stock is also the best-performing among the three, with gains of over 17% so far this year. 

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