NUE: Future Steel Demand And Tariff Policy Will Shape Share Performance

The analyst price target for Nucor has been raised by $4.00 to $173.69, as analysts factor in modestly stronger long term revenue growth, slightly higher margins, and a firmer valuation backdrop supported by recent upward target revisions across the Street, despite a still challenging macro environment.

Analyst Commentary

Bullish analysts have steadily lifted their price targets on Nucor, citing a more constructive long term outlook for steel pricing and demand, as well as the companys demonstrated ability to execute through cycles. Recent target increases reflect a view that Nucor can sustain healthy returns on capital even as the macro environment remains uneven.

Bullish Takeaways

Bullish analysts highlight refreshed commodity price forecasts that support higher long term steel spreads. This in turn bolsters confidence in Nucors earnings power and justifies higher valuation multiples.
Upward target revisions emphasize Nucors execution in recent quarters, with updated models incorporating stronger than previously expected profitability and cash generation.
Analysts see potential for resilient demand in the U.S. and Europe to offset weaker conditions in China. This supports a more stable volume outlook and reduces downside risk to growth assumptions.
Incremental price target hikes are framed as a recognition that the market may be underestimating the durability of Nucors competitive advantages and its ability to navigate cyclical headwinds.

Bearish Takeaways

Bearish analysts remain cautious on the broader macro backdrop, particularly the impact of slowing commodity demand in China on global steel pricing and sentiment, which could cap multiple expansion.
Some remain wary that recent price target increases may already embed optimistic assumptions on margins. This could leave less room for upside if pricing or volumes disappoint.
The lingering memory of prior share price volatility, including sharp drawdowns following negative updates, reinforces concerns that execution missteps could trigger outsized valuation resets.
There is ongoing skepticism around the sustainability of current demand levels in key end markets, with questions about how Nucor will manage growth if industrial activity decelerates more meaningfully.

What's in the News

Nucor enters a strategic agreement with The Nuclear Company to develop NQA 1 certified steel and support a revitalized U.S. nuclear supply chain, aligning with federal goals for large scale nuclear buildout and energy infrastructure investment (company announcement).
The Board approves an increase in Nucor's regular quarterly cash dividend to $0.56 per share, effective for the February 11, 2026 payment, which underscores confidence in ongoing cash generation (company announcement).
Nucor provides earnings guidance indicating lower consolidated results for the fourth quarter of 2025 versus the third quarter, citing seasonal factors, fewer shipping days and planned outages at DRI facilities (company guidance).
From July 6 to October 4, 2025, Nucor repurchases 700,000 shares for $98.23 million, completing a total of 21,794,000 shares bought back since May 2023, or about 9.09% of shares under its current authorization (company disclosure).
EU officials voice concern that a potential U.S. expansion of steel and aluminum tariffs on European exports could undermine recent trade understandings and reshape global steel flows, affecting producers including Nucor (Bloomberg).

Valuation Changes

The fair value estimate has risen modestly to $173.69 from $169.69, reflecting slightly stronger long-term assumptions for earnings power.
The discount rate has increased slightly to 8.56% from 8.47%, implying a marginally higher required return on capital.
Revenue growth has edged up to 4.68% from 4.67%, indicating a very small upgrade to long-term top line expectations.
The net profit margin has risen slightly to 9.55% from 9.40%, signaling a modest improvement in projected profitability.
The future P/E has increased marginally to 14.19x from 14.05x, suggesting a slightly firmer valuation multiple applied to forward earnings.

Strategic investments in new projects and facilities may enhance operational capacity and diversify earnings, driven by rising steel demand.
Policy changes like Section 232 tariffs could reduce import competition, supporting domestic sales growth and improved margins.
Economic uncertainty and project execution risks could impact Nucor's revenue and margins, while management changes and policy shifts might affect operations and costs.

Catalysts

About Nucor

Engages in the manufacture and sale of steel and steel products.What are the underlying business or industry changes driving this perspective?

Nucor's significant capital reinvestment of $860 million, with two-thirds directed towards projects commencing operations within two years, is expected to diversify and strengthen future earnings. This impacts revenue and net margins through enhanced production capacity and efficiencies.
The completion of new production facilities, including rebar micro mills and coating complexes, is anticipated to boost Nucor's operational capacity and potentially increase revenue due to higher product output and variety.
Nucor's expansion into advanced product grades and new markets, such as the advanced manufacturing facilities and infrastructure projects, may facilitate revenue growth due to rising steel demand from these sectors.
Trade policy improvements, like the reinstatement and broadening of Section 232 steel tariffs, could level the playing field for Nucor, potentially reducing import competition and supporting higher domestic sales and net margins.
Improved backlogs in steel mills, which are up over 30%, suggest strong future demand that could translate to increased revenue through sustained order flow and pricing stability.

Nucor Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Nucor's revenue will grow by 6.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.2% today to 9.9% in 3 years time.
Analysts expect earnings to reach $3.7 billion (and earnings per share of $13.27) by about September 2028, up from $1.3 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 11.6x on those 2028 earnings, down from 25.1x today. This future PE is lower than the current PE for the US Metals and Mining industry at 22.5x.
Analysts expect the number of shares outstanding to decline by 2.25% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.84%, as per the Simply Wall St company report.

Nucor Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Macro-economic uncertainty and volatility could negatively impact steel demand, which would in turn affect Nucor's revenue.
Execution risk associated with new projects coming online, such as the West Virginia sheet mill, could result in operational challenges and impact earnings.
Retirements of key executives and potential transitions may affect management execution and strategic continuity, potentially impacting operational efficiency and net margins.
Changes in trade policy, while intended to help domestic producers, could lead to retaliation or affect Nucor's access to certain raw materials, impacting costs and net margins.
Volatility in raw material prices, particularly scrap and DRI, could increase operating expenses and pressure margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $159.75 for Nucor based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $182.0, and the most bearish reporting a price target of just $145.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $37.2 billion, earnings will come to $3.7 billion, and it would be trading on a PE ratio of 11.6x, assuming you use a discount rate of 7.8%.
Given the current share price of $141.02, the analyst price target of $159.75 is 11.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Nucor?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Tariff Developments And Domestic Demand Shifts Will Define Steel Sector Performance