S&P 500$4141.59+13.6+0.33%

IO$171.0300%

NI$16140+65+0.4%

HRC$135400%

SS$43800%

CB$4981900%

AL$2297.25-7.25-0.31%

Top Aerospace Movers Up

  • save$37.04+1.03+2.86%
  • ba$253.27+3.75+1.5%
  • jblu$20.77+0.27+1.32%
  • luv$63.23+0.57+0.91%
  • ual$56.66+0.5+0.89%

Top Aerospace Movers Down

  • b$50.21-1.04-2.03%
  • lha€10.65-0.26-2.38%
  • trs$30.38-0.74-2.38%
  • hxl$56.5-1.75-3%
  • af€5.05-0.26-4.9%

Top Metals/Materials Up

  • cenx$14.96+0.77+5.43%
  • ggb$5.58+0.17+3.14%
  • lb$1180.7+23.15+2%
  • vale$18.19+0.1+0.55%
  • x$21.32+0.09+0.42%

Top Metals/Materials Down

  • wor$65.29-1.68-2.51%
  • ryi$15.53-0.43-2.69%
  • stld$50.42-1.41-2.72%
  • nue$78.28-2.25-2.79%
  • tmst$10.81-1-8.47%

Companies Under Coverage:

Coverage Universe
Chris D. Olin

Nucor Corporation (NUE): Gauging Upside/Downside Against Our Already Aggressive $10+ EPS Forecast For CY21

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

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Allegheny Technologies (ATI)
Chris D. Olin

The Titanium Snapshot (ATI, HAYN, CRS)

We are not picking up any new market intelligence this month to suggest there is an upward bias to earnings expectations for the specialty materials peer group. Last month, we raised near-term forecasts to reflect the better-than-expected nickel-based alloy and jet engine demand trends. However, we see few similarities in the titanium space as volume growth is holding in negative territory and contacts are still forecasting negative full-year growth. The main difference between this market and other alloys is the excess inventory held by the aero supply chain which could push the recovery starting point 6-9 months to the right (for companies levered to commercial airframe applications). Continue reading

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Coverage Universe
Chris D. Olin

Steel: Adjusting Ratings, Raising Price Targets and Revising Estimates Following Strong Survey Results

We rearranged the steel coverage group investment ratings to account for recent trading strength, the divergence between the closing prices and price targets, and higher earnings outlook(s). Today’s actions were triggered by the better-than-expected carbon steel survey results and review of future market drivers. Among the major changes, we upgraded Nucor (NUE) after considering the new earnings outlook and the rising potential for a stimulus trading boost. At the same time, we lowered STLD and RS to OUTPERFORM (versus Strong Buy) following the recent surge in trading. While still positive on these two names, we would be less aggressive. Finally, we referred to the surprising level of bullishness building throughout the channel and strong survey data points. The most interesting takeaway involved steel contacts raising their year-end HRC price forecast by $100-125/ton. Continue reading

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