"We reiterate our 'overweight' rating on U.S. Steel as we believe the structural changes in the steel industry and the re-pricing of 40% of U.S. Steel's Flat Rolled shipments continue to be underappreciated by the market," the firm stated.
Most of the supply cuts that caused steel stocks to rally this year are still in place, and domestic producers continue to fight unfairly traded imports, JPMorgan noted.
Additionally, the Chinese government appears to be addressing the overcapacity in the steel industry with industry consolidation, the firm said. Industry consolidation typically leads to capacity rationalization.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
U.S. Steel's weaknesses include its generally high debt management risk, disappointing return on equity and poor profit margins.
You can view the full analysis from the report here: X
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.