Analyst Note| Andrew Lane |
Having updated our valuation models to reflect second-quarter guidance from both Nucor and Steel Dynamics, our fair value estimate for each company is unchanged. We assign a $41 per share fair value to Nucor and $28 to Steel Dynamics. Both stocks continue to trade closely in line with these valuations. Both low-cost players, these two operators are among the highest quality companies in the global steel industry. However, we'd liken them to the "best houses in a bad neighborhood," when it comes to the broader steel industry. Accordingly, we continue to ascribe a no-moat rating to each company.