Nucor Corporation (NUE) is the nation’s largest recycler of steel scrap. Long-term contracts, constant cost-reduction efforts, higher steel prices, lower interest rates, strong cash flow position and a dominant acquisition strategy inspire our optimism with respect to the stock’s performance in the coming quarters. The company’s third-quarter 2008 profit nearly doubled, mainly because of robust sales from recently acquired steel and scrap-metal companies.

However, the company expects a 40% decline in steel shipments for the fourth quarter of 2008, which will result in lower earnings. A slowdown in steel demand from the automobile sector and increased production in China are matters of concern.

Rising prices of raw materials such as scrap and natural gas are serious issues facing the company. Thus, we maintain our Hold rating.

Read the full analyst report on NUE

“NUE” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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