Nucor may be undervalued with strong growth indicators, but the 12 analysts following the company give it an rating of hold. Their target prices range from $39.0 to $191.0 per share, for an average of $154.25. At today's price of $170.34, Nucor is trading 10.43% away from its average target price, suggesting there is an analyst belief that shares are overpriced for the stock.
Nucor Corporation engages in manufacture and sale of steel and steel products. Based in Charlotte, NC, the large-cap Industrials company has 31,400 full time employees. Nucor has provided a 1.2% dividend yield over the last 12 months.
Nucor has a trailing twelve month P/E ratio of 6.7, compared to an average of 20.49 for the Industrials sector. Considering its EPS guidance of $12.06, the company has a forward P/E ratio of 14.1.
The average compound growth rate of the company's historical and projected earnings per share is 23.8%. On this basis, the company's PEG ratio is 0.24. However, this growth rate is probably not sustainable. In its place we will use the broader market's estimated 5-year EPS growth rate of 10.5%, which gives us a PEG ratio of 0.55. Even with this more conservative assumption on EPS growth, the PEG ratio suggests that Nucor shares are underpriced.
Furthermore, the market is potentially undervaluing Nucor in terms of its book value because its P/B ratio is 2.25. In comparison, the sector average P/B ratio is 3.78. The company's shares are currently 11.1% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and net assets.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $22,589 | $20,140 | $36,484 | $41,512 |
| Gross Margins | 11.9% | 11.1% | 30.2% | 30.1% |
| Operating Margins | 8.7% | 8.0% | 25.5% | 25.3% |
| Net Margins | 5.63% | 3.58% | 18.71% | 18.33% |
| Net Income (MM) | $1,271 | $721 | $6,827 | $7,607 |
| Net Interest Expense (MM) | -$121 | -$153 | -$159 | -$170 |
| Depreciation & Amort. (MM) | -$735 | -$785 | -$865 | -$1,062 |
| Earnings Per Share | $4.14 | $2.36 | $23.16 | $25.57 |
| EPS Growth | n/a | -43.0% | 881.36% | 10.41% |
| Diluted Shares (MM) | 306 | 303 | 293 | 251 |
| Free Cash Flow (MM) | $1,332 | $1,154 | $4,609 | $8,124 |
| Capital Expenditures (MM) | -$1,477 | -$1,543 | -$1,622 | -$1,948 |
| Net Current Assets (MM) | $673 | $595 | $1,580 | $1,782 |
| Current Ratio | 3.34 | 3.61 | 2.48 | 3.39 |
| Long Term Debt (MM) | $4,291 | $5,272 | $4,961 | $6,614 |
| Net Debt / EBITDA | 1.12 | 1.63 | 0.33 | 0.22 |
