After raising estimates for the current quarter and year to reflect the better-than-expected mid-quarter guidance issued by the management team last week, we examined some of the larger NUE portfolio drivers, looking to gauge the upside and downside risk as it relates to two major issues: (1) the sustainability of the Section 232 trade protections during a new period of US Presidential leadership; and (2) the upside bias associated with the release of a large infrastructure bill. Starting with a $10.00+ and $8.28/share earnings forecast for CY21 and CY22, respectively, already well above consensus, we calculated roughly $1.75-2.00 of potential earnings upside associated with surging demand for niche carbon steel products dedicated for large-volume public construction projects. Conversely, we assume there to be $1.40-1.50/share of earnings dilution risk should President Joe Biden rescind Section-232 trade protections. This implies a +30% risk/reward profile. Continue reading