Last Update 27 Nov 25
Fair value Increased 1.36%NUE: Future Demand Recovery And Tariff Risks Will Define Share Performance
Nucor's analyst price target has increased from $167.42 to $169.69, as analysts cite updated pricing models and expectations for improving demand in key markets, despite ongoing macroeconomic challenges.
Analyst Commentary
Recent analyst updates reflect a renewed focus on Nucor’s growth prospects in light of an evolving macroeconomic landscape. Pricing targets have generally trended upward despite sector challenges, which underscores shifting assessments of risk and opportunity.
Bullish Takeaways- Bullish analysts see potential for a rebound in demand in the United States and Europe. This could offset global weakness, particularly in China.
- Increased price targets indicate confidence that Nucor can adapt to changes in commodity markets and maintain solid execution on its operational forecasts.
- Recent analyst model updates suggest that key company commentary and new price forecasts are being positively received, which supports expectations for improving results in future quarters.
- Continued Buy and Overweight recommendations highlight a belief in Nucor’s ability to capitalize on industrial demand and navigate near-term headwinds effectively.
- Bearish analysts maintain that the macroeconomic environment remains challenging and cite slowdowns in global commodity demand, particularly from China.
- There is some caution that upward target revisions may be limited if end markets do not deliver the anticipated recovery in demand.
- Recent price volatility, including notable pullbacks after negative corporate news, serves as a reminder of execution risk and sensitivity to quarterly developments.
What's in the News
- EU officials are warning against potential U.S. expansion of tariffs on EU steel and aluminum, expressing concern about impacts on trade agreements and steel companies including Nucor (Bloomberg).
- Nucor provided preliminary guidance indicating expectations for lower consolidated earnings in the fourth quarter of 2025, citing seasonal effects, fewer shipping days, and scheduled outages at DRI facilities.
- Between July and early October 2025, Nucor repurchased 700,000 shares for $98.23 million, completing 9.09% of its total buyback plan announced in May 2023.
- Nucor announced a strategic partnership with The Nuclear Company to strengthen the U.S. nuclear supply chain and support domestic manufacturing in line with stringent certification standards and national energy goals.
Valuation Changes
- Consensus Analyst Price Target has risen slightly, moving from $167.42 to $169.69.
- Discount Rate has declined marginally from 8.49% to 8.47%.
- Revenue Growth expectations have fallen, shifting from 5.83% to 4.67%.
- Net Profit Margin is projected to improve, increasing from 8.86% to 9.40%.
- Future P/E has edged upward, changing from 13.72x to 14.05x.
Key Takeaways
- 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.
- 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.
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.