Nucor
NUE
$248.38
-6.32%
Nucor Corporation is the largest steel producer in the United States, operating electric arc furnace (EAF) steel mills that manufacture sheet, plate, structural, and bar steel, complemented by steel products and raw materials segments. As a low-cost, scrap-based producer with a vertically integrated model, Nucor is widely viewed as the most efficient and innovative operator in the domestic steel industry, distinct for its decentralized management culture and early mover advantage in EAF technology. The current investor narrative centers on the durability of domestic steel pricing power amid a shifting tariff regime, with the expiration of the 10% global tariff replaced by Section 301 measures covering 60 countries at 10% to 12.5% rates, and a 25% Section 301 tariff on Brazil reducing import competition. This protectionist backdrop, combined with robust steel demand and pricing highlighted by peer Cleveland-Cliffs' doubled EBITDA guidance, has driven Nucor shares sharply higher over the past year, though recent consolidation reflects debate over whether peak-cycle margins are sustainable.…
NUE
Nucor
$248.38
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Investment Opinion: Should I buy NUE Today?
The synthesized recommendation is a Hold with a bullish bias. The analyst consensus is "buy" with a mean rating of 1.53 (where 1 is strong buy), and the average target price of $283.69 implies 9.3% upside. However, the stock has already rallied 80.47% over the past year and 53.15% year-to-date, leaving limited margin of safety. The core thesis is that Nucor is a high-quality, low-cost steel producer benefiting from tariff-driven pricing power and an earnings recovery, but the cyclical nature of the industry and the stock's high beta warrant caution at current levels.
Supporting evidence includes the 21.28% year-over-year revenue growth in Q1 2026, the expansion of gross margin to 15.81% from 7.73%, and the forward PE of 13.28, which is below the trailing PE of 21.66 and suggests the market expects earnings growth. The balance sheet is strong with a debt-to-equity of 0.34 and a current ratio of 2.94, and the dividend yield of 1.36% is sustainable with a payout ratio of 29.36%. However, free cash flow is only $532 million trailing twelve months, and the price-to-sales ratio of 1.16 is near the low end of its historical range, which could be a value trap if margins normalize.
The biggest risks are a reversal in steel pricing, a relaxation of tariffs, and the stock's high beta (1.881) leading to amplified downside. The rating would upgrade to Buy if the stock pulls back to the $230-$240 support zone (near the analyst low target) or if forward PE compresses below 12x. It would downgrade to Sell if revenue growth decelerates below 10% or if gross margins fall below 10%. Relative to its history and peers, Nucor appears fairly valued; the market is pricing in a cyclical recovery, but not excessive optimism.
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NUE 12-Month Price Forecast
Nucor is a high-quality steel producer with a strong balance sheet and improving profitability, but the stock has already priced in much of the recovery. The forward PE of 13.28 is attractive if earnings estimates are met, but the cyclical nature of the industry and the high beta pose significant risks. The analyst consensus is bullish, but the limited upside to the average target and the wide range of targets ($231-$308) suggest uncertainty. I would upgrade to bullish if the stock pulls back to the $230-$240 range or if forward PE drops below 12x, and downgrade to bearish if revenue growth slows below 10% or if tariffs are relaxed.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nucor's 12-month outlook, with a consensus price target around $285.31 and implied upside of +14.9% versus the current price.
Average Target
$285.31
0 analysts
Implied Upside
+14.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$231 - $310
Analyst target range
The stock is covered by 16 analysts, with a consensus recommendation of "buy" and a recommendation mean of 1.53 (where 1 is a strong buy and 5 is a strong sell). The average price target is $283.69, which implies approximately 9.3% upside from the current price of $259.43. The consensus leans bullish, supported by recent analyst actions: KeyBanc upgraded the stock to Overweight from Sector Weight on June 24, 2026, while UBS downgraded to Neutral from Buy on April 28, 2026, indicating some divergence in sentiment. The target range spans from a low of $231.00 to a high of $308.00, a spread of $77 or about 33% of the current price, signaling moderate uncertainty. The high target of $308 assumes continued tariff-driven pricing power, strong demand from infrastructure spending, and successful execution on growth projects, potentially driving multiple expansion. The low target of $231 reflects concerns about margin compression, a potential slowdown in construction activity, or increased import competition if tariffs are relaxed. The wide spread between the high and low targets suggests that analysts are divided on the sustainability of current steel pricing and the cyclical earnings trajectory, which is typical for a commodity stock at a potential inflection point.
Bulls vs Bears: NUE Investment Factors
The bull case rests on accelerating revenue growth (+21.28% YoY), dramatic margin expansion (gross margin up 808 basis points YoY), and a favorable tariff environment that supports domestic pricing power. The bear case centers on the cyclicality of steel, with trailing margins well below recent peaks, a high beta of 1.881, and limited analyst upside of just 9.3%. Currently, the bull evidence is stronger, as the company is in the early innings of an earnings recovery, and the forward PE of 13.28 suggests the market is not pricing in peak earnings. The most critical tension is whether current steel pricing and margins are sustainable or if they represent a cyclical peak; if tariffs remain durable and demand holds, the bull case prevails, but any sign of pricing weakness could trigger a sharp correction given the stock's 80% one-year gain.
Bullish
- Revenue growth accelerating: Q1 2026 revenue of $9.496 billion grew 21.28% year-over-year, accelerating from 8.5% in Q4 2025 and 9.1% in Q3 2025. This top-line momentum reflects both favorable steel pricing and robust demand, positioning Nucor for continued earnings leverage.
- Margin expansion and operating leverage: Gross margin expanded to 15.81% in Q1 2026 from 7.73% a year earlier, while operating margin surged to 11.54% from 4.14%. Net income jumped to $743 million (7.82% net margin) from $156 million (1.99% net margin), demonstrating significant operating leverage as volumes and pricing improve.
- Attractive forward valuation: The forward PE of 13.28 is well below the trailing PE of 21.66, implying the market expects substantial earnings growth. With analyst EPS estimates of $17.31 for the coming year, the stock trades at a reasonable multiple relative to its historical range and the broader sector.
- Strong balance sheet and liquidity: Debt-to-equity of 0.34 and a current ratio of 2.94 provide ample financial flexibility. The company generated $225 million in free cash flow in Q1 2026, a turnaround from negative $495 million a year ago, and continues to return capital via dividends ($129 million in Q1).
Bearish
- Cyclical peak margin risk: Trailing twelve-month gross margin is only 11.93% and operating margin 8.18%, well below Q1 2026's 15.81% and 11.54%. If steel prices normalize, margins could compress sharply, as seen in Q1 2025 when gross margin was just 7.73% and net income was $156 million.
- High beta and volatility: Beta of 1.881 means the stock is nearly twice as volatile as the market. The maximum drawdown of -18.43% over the past 180 days highlights the risk of sharp reversals, and the recent 4.55% one-month decline and negative relative strength versus SPY (-3.49%) suggest momentum is waning.
- Analyst target implies limited upside: The average price target of $283.69 offers only 9.3% upside from the current price of $259.43. The low target of $231.00 is 11% below current levels, indicating that some analysts see downside risk if steel pricing weakens or tariffs are relaxed.
- Weak free cash flow conversion: Despite strong earnings, trailing twelve-month free cash flow is only $532 million, constrained by heavy capital expenditures ($661 million in Q1 2026 alone). This limits financial flexibility and could pressure the dividend if capex remains elevated.
NUE Technical Analysis
Nucor is in a powerful, sustained uptrend, with the stock up 80.47% over the past year and 53.15% year-to-date, massively outperforming the S&P 500's 16.22% and 12.08% respective gains. At a current price of $259.43, the stock sits at approximately 86% of its 52-week range (low of $131.32, high of $280.11), indicating strong momentum but also proximity to overextension territory. The relative strength versus SPY of +64.25% over one year confirms Nucor's leadership, though the stock's position near the upper end of its range warrants vigilance for mean reversion. Recent momentum has decelerated sharply, with the stock down 4.55% over the past month and 2.60% over three months, diverging from the robust 58.69% six-month gain. This short-term weakness, reflected in a negative 3.49% relative strength versus SPY over one month, suggests a consolidation phase or profit-taking after a parabolic run from March through August. The divergence between the strong 1-year trend and negative 1-month performance could signal either a healthy pullback within an ongoing uptrend or an early trend reversal, particularly given the stock's elevated beta of 1.881, which implies roughly 88% more volatility than the broader market. Key technical support lies near the 52-week low of $131.32, with intermediate support around the $240-$245 area where the stock recently found footing after its August pullback. Resistance is defined by the 52-week high of $280.11; a breakout above this level would signal renewed momentum and likely target higher prices, while a breakdown below $240 could expose the stock to a deeper correction toward the $220 region. The maximum drawdown of -18.43% over the period underscores the stock's vulnerability to sharp reversals, making position sizing critical for risk management given the high beta.
Beta
1.88
1.88x market volatility
Max Drawdown
-18.4%
Largest decline past year
52-Week Range
$131-$280
Price range past year
Annual Return
+84.9%
Cumulative gain past year
| Period | NUE Return | S&P 500 |
|---|---|---|
| 1m | -0.1% | -1.0% |
| 3m | +1.9% | +2.0% |
| 6m | +56.6% | +17.4% |
| 1y | +84.9% | +15.0% |
| ytd | +46.6% | +11.7% |
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NUE Fundamental Analysis
Nucor's revenue trajectory has been robust, with the most recent quarter (Q1 2026, ended April 4, 2026) delivering $9.496 billion in revenue, representing 21.28% year-over-year growth from $7.83 billion in Q1 2025. This marks a significant acceleration from the prior quarters: Q4 2025 revenue was $7.687 billion, Q3 2025 was $8.521 billion, and Q2 2025 was $8.456 billion, indicating a clear upward trend in top-line performance. The sheet segment is the largest contributor at $2.791 billion, followed by bar at $1.689 billion and steel products at $988 million, with structural, plate, raw materials, tubular, and rebar fabrication rounding out the portfolio. The strong revenue growth, driven by favorable pricing and demand, supports a positive investment case, though the cyclical nature of steel means investors must monitor for signs of peak demand. Profitability has improved markedly, with Q1 2026 net income of $743 million and a net margin of 7.82%, up from $156 million and 1.99% in Q1 2025. Gross margin expanded to 15.81% in Q1 2026 from 7.73% a year earlier, while operating margin reached 11.54% versus 4.14%, reflecting operating leverage and pricing power. The trailing twelve-month gross margin stands at 11.93% and operating margin at 8.18%, with a net margin of 5.37%, all consistent with a cyclical upswing in the steel industry. The balance sheet remains healthy, with a debt-to-equity ratio of 0.34 and a current ratio of 2.94, indicating ample liquidity. Free cash flow for Q1 2026 was $225 million, a turnaround from negative $495 million in Q1 2025, though trailing twelve-month FCF is only $532 million, constrained by heavy capital expenditures of $661 million in the quarter. Return on equity is 8.33% and return on assets is 7.32%, modest but improving, while the company's investment-grade balance sheet and consistent dividend payments ($129 million in Q1 2026) underscore financial stability.
Quarterly Revenue
$9.5B
2026-04
Revenue YoY Growth
+21.3%
YoY Comparison
Gross Margin
15.8%
Latest Quarter
Free Cash Flow
$532000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NUE Overvalued?
With net income positive at $743 million in the most recent quarter and a trailing PE ratio of 21.66, the PE ratio is the appropriate primary valuation metric. The forward PE of 13.28 is significantly lower than the trailing PE, implying the market expects substantial earnings growth, consistent with analyst EPS estimates of $17.31 for the coming year. This gap between trailing and forward multiples suggests that investors are pricing in a cyclical recovery that will boost profitability. Compared to the broader Basic Materials sector, Nucor's forward PE of 13.28 appears reasonable, though the sector average is not directly provided; however, the stock's price-to-book ratio of 1.80 and price-to-sales ratio of 1.16 are modest relative to historical levels. The EV/EBITDA of 10.35 is in line with industry norms for an integrated steel producer, while the dividend yield of 1.36% and payout ratio of 29.36% indicate a balanced capital return policy. The PEG ratio is negative at -1.95 due to the trailing earnings decline, but this is not meaningful given the cyclical earnings pattern. Historically, Nucor's PE ratio has ranged from as low as 2.73 in Q2 2022 to 38.51 in Q1 2025, with the current 21.66 sitting in the middle of that range. The price-to-sales ratio of 1.16 is near the low end of its historical band, which has ranged from 2.36 to 5.91 over the past five years, suggesting the stock is not expensive on a sales basis. The price-to-book ratio of 1.80 is also below the historical average, indicating that the market is not pricing in excessive optimism despite the strong price performance.
PE
21.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 3x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.3x
Enterprise Value Multiple
Investment Risk Disclosure
Nucor's financial risks are moderate but tied to its cyclical business. The debt-to-equity ratio of 0.34 and current ratio of 2.94 indicate a healthy balance sheet, but free cash flow is weak at $532 million trailing twelve months, constrained by $661 million in quarterly capex. Margins are highly volatile: gross margin swung from 7.73% in Q1 2025 to 15.81% in Q1 2026, and a reversal could quickly erode profitability. Additionally, revenue is concentrated in the steel mills segment, particularly sheet steel ($2.791 billion in Q1 2026), exposing the company to downturns in construction and manufacturing demand.
Market and competitive risks are significant given the stock's high beta of 1.881 and its 80.47% one-year gain. The shares are trading near the upper end of their 52-week range (86% of the range), and the recent 4.55% one-month decline suggests momentum is fading. Valuation could compress if steel prices fall; the forward PE of 13.28 is reasonable but relies on analyst EPS estimates of $17.31, which may prove optimistic if tariffs are relaxed or imports surge. Regulatory risks include the potential for trade policy shifts, as the current Section 301 tariffs cover 60 countries but could be challenged or modified. Competitive pressures from electric arc furnace peers like Steel Dynamics and Cleveland-Cliffs, which recently doubled EBITDA guidance, could also limit Nucor's pricing power.
The worst-case scenario would involve a sharp decline in steel demand, margin compression, and multiple contraction. If steel prices revert to 2025 lows, earnings could fall back to $0.67 per share quarterly (as in Q1 2025), and the stock could retest its 52-week low of $131.32, representing a 49% decline from the current price of $259.43. The analyst low target of $231.00 implies an 11% downside, but in a severe downturn, the stock could fall further. Given the maximum drawdown of -18.43% over the past 180 days, investors should be prepared for significant volatility; a realistic bear-case loss could be 30-40% from current levels if the cycle turns.
FAQ
The most severe risk is cyclical margin compression: trailing twelve-month gross margin is only 11.93%, and a decline in steel prices could quickly erode profitability, as seen in Q1 2025 when net income was just $156 million. Second, the stock's high beta of 1.881 makes it nearly twice as volatile as the market, and the maximum drawdown of -18.43% over the past 180 days highlights the potential for sharp losses. Third, tariff policy risk: the current Section 301 tariffs support pricing, but any relaxation could increase imports and pressure domestic prices. Fourth, free cash flow is weak at $532 million trailing twelve months, constrained by heavy capex, which could limit financial flexibility if earnings decline. These risks are ranked from most to least severe, with margin compression being the primary concern.
Our 12-month forecast for Nucor includes three scenarios. The base case (50% probability) targets $270-$290, assuming steel demand stabilizes and earnings meet analyst estimates of $17.31 per share, with the stock trading around the average target of $283.69. The bull case (30% probability) targets $300-$320, driven by durable tariffs, strong infrastructure demand, and earnings beats, approaching the analyst high target of $308. The bear case (20% probability) targets $200-$230, assuming a demand slowdown, margin compression, and tariff relaxation, testing the analyst low target of $231. The most likely scenario is the base case, with the key assumption that steel prices remain range-bound and tariffs stay in place.
Nucor appears fairly valued to slightly undervalued on a forward basis. The forward PE of 13.28 is well below the trailing PE of 21.66, reflecting expected earnings growth, and the price-to-sales ratio of 1.16 is near the low end of its five-year range (2.36 to 5.91). The price-to-book ratio of 1.80 is also below historical averages. However, the EV/EBITDA of 10.35 is in line with industry norms, and the dividend yield of 1.36% is modest. The market is pricing in a cyclical recovery, but not excessive optimism; if earnings disappoint, the stock could be overvalued. Compared to peers, Nucor's valuation is reasonable, but the cyclical peak in margins suggests caution.
Nucor presents a mixed risk/reward at the current price of $259.43. The analyst consensus is "buy" with an average target of $283.69, implying 9.3% upside, but the stock has already surged 80.47% over the past year and trades near the upper end of its 52-week range. The forward PE of 13.28 is attractive if earnings estimates of $17.31 per share are met, but the cyclical nature of steel and the high beta of 1.881 mean significant downside risk if pricing weakens. For long-term investors, Nucor is a quality operator with a strong balance sheet (debt-to-equity of 0.34) and a sustainable dividend (1.36% yield), but the current valuation offers limited margin of safety. A better entry point may be on a pullback to the $230-$240 support zone.
Nucor is better suited for medium to long-term investment (minimum 2-3 years) rather than short-term trading. The stock's high beta of 1.881 and cyclical earnings make it prone to sharp swings, as evidenced by the -18.43% maximum drawdown over the past 180 days. However, the company's strong balance sheet, consistent dividend (1.36% yield), and low-cost EAF model provide long-term value. Short-term traders may find opportunities around earnings or tariff news, but the risk of volatility is high. For long-term investors, Nucor offers exposure to domestic steel demand and infrastructure spending, but position sizing should account for the cyclical nature of the industry. A suggested minimum holding period is 2-3 years to ride out cyclical downturns.