US Steel Shares Climb As Analyst Upgrades Stock

The analyst wrote that U.S. Steel "has the most earnings leverage to improving operating rates, and a favorable product mix for the sequenced fundamental improvement we expect."

"Upside based on normalized earnings is 28 percent, the most in our group" of steel companies, Liinamaa wrote.

Liinamaa also upgraded AK Steel Holding Corp. to "Equal-weight" from "Underweight," writing the company "may benefit from a 'Cash for Clunkers' program later this year as roughly 30 percent of its sales are auto-related."

He downgraded Nucor Corp. to "Equal-weight" from "Overweight," noting that Nucor shares outperformed those of other steel companies late last year and earlier this year, "but the stock has moved to our prior $48 price target, which is now our base case."

Shares of U.S. Steel climbed $2.90, or 8.3 percent, to $37.96 in afternoon trading. AK Steel shares rose $1.95, or 11.2 percent, to $19.35. Nucor stock advanced $1.17, or 2.5 percent, to $47.93.