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Stock Strategist Industry Reports

More Pain Ahead for U.S. Steelmakers

Even after their shares have traded down, we see little upside.

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Although the shares of U.S. steelmakers have traded sharply lower in recent months, we see little upside and urge bargain hunters to seek greener pastures. In 2015, the group faced a perfect storm that included massive global overcapacity, weak demand, high import levels, low capacity utilization, and a deflationary price environment. For the most part, these headwinds remain and are likely to persist.

We maintain a cautious long-term outlook for the U.S. steelmakers we cover, a list that includes  AK Steel (AKS),  Commercial Metals (CMC),  Nucor (NUE),  Steel Dynamics (STLD), and  U.S. Steel (X). None of these companies has an economic moat, in our opinion.

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Andrew Lane does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.