Now trading at a price of $170.41, Nucor has moved 0.3% so far today.
Nucor returned gains of 11.0% last year, with its stock price reaching a high of $182.68 and a low of $129.47. Over the same period, the stock underperformed the S&P 500 index by -3.0%. As of April 2023, the company's 50-day average price was $153.43. 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 offered a 1.2% dividend yield over the last 12 months.
The Business Has Weak Operating Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $25,067 | $22,589 | $20,140 | $36,484 | $41,512 | $35,733 |
| Gross Margins | 17% | 12% | 11% | 30% | 30% | 24% |
| Operating Margins | 13% | 8% | 4% | 25% | 25% | 19% |
| Net Margins | 10% | 6% | 4% | 20% | 19% | 15% |
| Net Income (MM) | $2,481 | $1,371 | $836 | $7,122 | $8,080 | $5,366 |
| Net Interest Expense (MM) | $161 | $157 | $167 | $163 | $219 | $243 |
| Depreciation & Amort. (MM) | $631 | $649 | $702 | $735 | $827 | $898 |
| Earnings Per Share | $7.42 | $4.14 | $2.36 | $23.16 | $28.79 | $19.72 |
| Diluted Shares (MM) | 317 | 306 | 303 | 293 | 263 | 222 |
| Free Cash Flow (MM) | $1,411 | $1,332 | $1,154 | $4,609 | $8,124 | $6,111 |
| Capital Expenditures (MM) | $983 | $1,477 | $1,543 | $1,622 | $1,948 | $2,014 |
| Net Current Assets (MM) | $918 | $673 | $595 | $1,580 | $1,782 | $3,190 |
| Long Term Debt (MM) | $4,233 | $4,291 | $5,272 | $4,961 | $6,614 | $6,621 |
| Net Debt / EBITDA | 0.78 | 1.2 | 1.81 | 0.33 | 0.22 | 0.1 |
Nucor has growing revenues and increasing reinvestment in the business, low leverage, and a strong EPS growth trend. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a positive growth rate. Finally, we note that Nucor has irregular cash flows.
Nucor Has Attractive Multiples and Trades Below Its Graham Number:
Nucor has a trailing twelve month P/E ratio of 7.8, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $12.11, the company has a forward P/E ratio of 12.7. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 17.7%. On this basis, Nucor's PEG ratio is 0.44. Using instead the 10.0% weighted average of Nucor's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 0.78, which implies that its shares may be underpriced. Additionally, the market is possibly undervaluing Nucor in terms of its equity because its P/B ratio is 2.05 whereas the sector average is 4.06. The company's shares are currently trading -15.9% below their Graham number.
Nucor Has an Average Rating of Buy:
The 8 analysts following Nucor have set target prices ranging from $39.0 to $190.0 per share, for an average of $158.75 with a buy rating. As of April 2023, the company is trading -3.4% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Nucor has an average amount of shares sold short because 2.9% of the company's shares are sold short. Institutions own 81.5% of the company's shares, and the insider ownership rate stands at 0.62%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $5,109,283,000.
