Three U.S. steel producers warned investors this week that their third-quarter earnings won't meet Wall Street's expectations. One analyst's message to investors? Stop worrying about it.
Citi Investment Research analyst Brian Yu said in a note to clients Thursday that the segment's stocks are still a good value despite some uncertainty. And he believes steel production, and prices, should increase in the fourth quarter.
That's a welcome forecast for the nation's steel makers, who are currently in a tight spot. Overseas growth is increasing demand for their products, but it's making it more expensive for U.S. companies like automakers and appliance manufacturers as they try to recover from the recession.
Steel Dynamics Inc. on Tuesday said its third-quarter earnings would come in below expectations. Nucor Corp. on Tuesday said its third-quarter earnings will decline from the second quarter. And on Wednesday, AK Steel said it expects to post an operating loss in the third quarter.
Yu thinks steel stocks will climb along with steel prices as they recover from August lows, judging from some key manufacturing and production indexes and a renewed focus in Washington on infrastructure spending.
© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.