Risks to the buy rating include stiff competition from wireline and cable operators, merger-related challenges and a decline in return on equity, all of which could restrict the company's growth prospects.
Steel manufacturer and retailer Nucor(NUE Quote) has been rated a buy since March 2005. The company has shown strong financial performance driven by higher volume resulting from improved steel prices and higher steel shipments. Nucor has shown exceptional shareholder returns due to improved return on equity, steady EPS growth and the recent acquisition of Harris Steel Group, which enhanced its market presence in reinforced steel bars, wire mesh and heavy industrial steel grating. The principal risk to the rating is presented by any continued steel imports into the U.S. market, which could result in an inventory glut and hurt prices. Any unexpected increase in steel scrap costs could also hurt Nucor's operating margin.
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