Usually, a winning earnings report is good for a few extra percentage points in a stock’s share price. Steel Dynamics (NASDAQ:STLD) found out as much in Thursday’s trading, adding just under 5% thanks to a mostly solid earnings report.
There were several high points to the released report, starting with adjusted earnings per share that turned out well above analyst estimates. Steel Dynamics turned in $4.01 per share against analyst estimates that looked for just $3.59 per share. Further, Steel Dynamics sent out ferrous shipments that were up 15% against this time last year, and nonferrous shipments were up an additional 9.5%. Income derived from metals recycling exploded, reaching $345 million and almost doubling the figures seen in the fourth quarter. Steel Dynamics topped this all off with record-breaking metal shipments.
However, all wasn’t as well as it might have been. Steel Dynamics’ revenue levels overall missed estimates, coming in at $4.89 billion against analyst expectations looking for $4.95 billion. Further, overall revenue was down 12.2% against this time last year. But Steel Dynamics balanced this shortfall out with some inspirational guidance, expecting demand for “lower-carbon emission, U.S.-produced steel products” to rise in 2023 and support overall pricing levels.
Analysts are less certain about that outlook. Current analyst consensus calls Steel Dynamics stock a Hold, with two Buy ratings against one Sell and five Holds. Moreover, its average price target of $104.67 gives it 6.1% downside risk.
