NEW YORK (
-- Nucor Corp
) 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:
- 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 ($2.74 versus $0.42).
- 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 229.4% when compared to the same quarter one year prior, rising from $90.99 million to $299.77 million.
- Despite currently having a low debt-to-equity ratio of 0.58, 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 2.06 is high and demonstrates strong liquidity.
- The gross profit margin for NUCOR CORP is rather low; currently it is at 15.90%. 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 5.90% is significantly lower than the same period one year prior.
- NUE has underperformed the S&P 500 Index, declining 18.71% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
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 22.9, below the average metals & mining industry P/E ratio of 23.1 and above the S&P 500 P/E ratio of 17.7. Nucor has a market cap of $10.7 billion and is part of the
industry. Shares are down 27% year to date as of the close of trading on Friday.
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