NUE

Analysis of Nucor (NUE) Stock

Technical Perspective NUE shows strong momentum over the past three months, though its recent performance has moderated, suggesting possible consolidation. Trading near its 52-week high indicates limited short-term upside unless it breaks through resistance levels. Its high beta signals significant volatility, aligning with the stock's historical sensitivity to market movements.

Fundamental Health Nucor maintains solid financial health with a strong balance sheet, low debt, and ample liquidity. However, profitability margins have softened slightly, and operational efficiency metrics like return on equity and asset turnover remain modest, indicating potential areas for improvement despite stable revenue growth.

Valuation Concerns Valuation appears mixed: the forward P/E is reasonable, but elevated trailing P/E, EV/EBITDA, and PEG ratios suggest the stock may be overvalued relative to near-term earnings growth. Without industry peer data, it's difficult to assess whether these multiples are justified within the steel sector.

Risk Assessment NUE carries high volatility risk due to its sensitivity to market swings and exposure to cyclical steel demand. While low short interest reflects a lack of bearish sentiment, investors should consider macroeconomic factors and raw material cost fluctuations as ongoing risks.

Investment Recommendation

Nucor demonstrates robust financials and strong recent momentum, but current valuation levels appear stretched relative to earnings growth potential. Given its cyclical nature and high volatility, the stock may be better suited for investors with a higher risk tolerance and a long-term perspective. While not overly expensive on a forward P/E basis, waiting for a pullback or clearer sector-wide valuation benchmarks could provide a more attractive entry point.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis, the 12-month outlook for Nucor (NUE) is cautiously optimistic but dependent on market conditions. Key positive catalysts include the company's robust balance sheet, strong liquidity, and potential benefits from sustained infrastructure spending. The primary risks are its high sensitivity to economic cycles and volatility, with softening profitability margins and potentially stretched valuations capping significant near-term upside. Given the absence of a specific analyst target and the stock trading near 52-week highs, a realistic target price range is likely between $175 and $195, contingent on stable steel demand and successful navigation of cost pressures.

Wall Street Consensus

Most Wall Street analysts are optimistic about NUE's 12-month outlook, with consensus target around $172.29, indicating expected upside potential.

Overall, NUE has investment potential but also faces challenges. Here are key factors to weigh before investing.

NUE Technical Analysis

Overall Assessment NUE demonstrates strong momentum with significant outperformance against the market over the past three months, though recent gains have moderated considerably in the short term, suggesting a potential consolidation phase.

Short-term Performance The stock's 1-month return of 1.75% reflects muted near-term momentum compared to its substantial 22.66% three-month surge, indicating a recent slowdown in bullish pressure. Despite this deceleration, NUE maintains a robust 19.29% outperformance relative to the market over three months, amplified by its high beta of 1.88, which signals elevated volatility and sensitivity to broader market movements.

Current Position Trading at $169.48, NUE sits near the upper boundary of its 52-week range ($97.59-$171.94), approximately 1.4% below the peak, indicating proximity to overbought territory. The current price level—coupled with a maximum drawdown of -27.58% over the past year—underscores persistent volatility, but the narrow gap to the 52-week high suggests limited immediate upside without a breakout above resistance.

Revenue & Profitability: NUE's Q3 2025 revenue of $8.52 billion showed modest sequential growth from Q2's $8.46 billion. Profitability metrics softened slightly, with the net profit margin declining to 7.12% from 7.13% in the prior quarter, reflecting modest margin pressure despite stable revenue.

Financial Health: The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.33 and a robust interest coverage ratio of 23.4. The current ratio of 2.77 indicates substantial liquidity, supported by a healthy cash ratio of 0.52, underscoring minimal financial risk.

Operational Efficiency: NUE's operational efficiency is mixed, with a relatively low return on equity of 2.92% and a modest asset turnover of 0.25. The 74.6-day cash conversion cycle demonstrates adequate working capital management, though the fixed asset turnover of 0.57 suggests room for improvement in long-term asset utilization.

NUE's valuation metrics present a mixed picture. The forward P/E of 13.1 appears reasonable, but this is offset by concerning signals from other indicators. The high trailing P/E of 24.4, elevated EV/EBITDA of 28.4, and particularly the substantial PEG ratio of 17.1 suggest the stock may be overvalued relative to its near-term earnings growth prospects. The PB ratio of 1.73 and PS ratio of 1.23 appear moderate in isolation but require industry context for proper assessment.

For a peer comparison, a comprehensive analysis is hindered by the unavailability of industry average data. Without benchmarks for steel producers' typical valuation multiples, it's impossible to determine whether NUE trades at a premium or discount to its sector peers. This gap in comparative data prevents drawing any meaningful conclusions about NUE's relative valuation within the industrial metals and mining industry.

Volatility Risk: NUE exhibits high volatility risk due to its beta of nearly 1.9, indicating significant price swings relative to the broader market. This heightened sensitivity is further evidenced by a substantial one-year maximum drawdown of approximately -28%, which presents considerable downside risk during adverse market conditions.

Other Risks: The absence of notable short interest implies market participants do not hold a significant bearish conviction on the stock. However, investors should remain aware of other potential risks, such as exposure to cyclical demand in the steel industry and sensitivity to macroeconomic factors like industrial production and raw material costs.