Rating Change #4
Nucor Corp (NUE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the ratings report include:
- NUE has underperformed the S&P 500 Index, declining 7.44% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The gross profit margin for NUCOR CORP is currently extremely low, coming in at 12.10%. Regardless of NUE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NUE's net profit margin of 3.30% is significantly lower than the same period one year prior.
- Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.24 is high and demonstrates strong liquidity.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 416.2% when compared to the same quarter one year prior, rising from $30.96 million to $159.84 million.
- NUCOR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NUCOR CORP turned its bottom line around by earning $0.42 versus -$0.95 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $0.42).
Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The company has a P/E ratio of 48.8, equal to the average metals & mining industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Nucor has a market cap of $12.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 9.9% year to date as of the close of trading on Tuesday.You can view the full Nucor Ratings Report or get investment ideas from our investment research center.
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