| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 0/6 |
| Past Performance | 6/6 |
| Financial Health | 6/6 |
| Dividends | 2/6 |
X Stock Overview
United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe.
United States Steel Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$20.43 |
| 52 Week High | US$39.25 |
| 52 Week Low | US$16.41 |
| Beta | 2.15 |
| 1 Month Change | -5.90% |
| 3 Month Change | 19.82% |
| 1 Year Change | -8.96% |
| 3 Year Change | 85.22% |
| 5 Year Change | -18.22% |
| Change since IPO | -21.42% |
Recent News & Updates
U.S. Steel: The Bust Opportunity Has Not Arrived
Summary The threat of a severe recession has continued to send U.S. Steel sliding further from its August highs, even though the company posted a remarkable Q2. We discuss why investors need to expect more pain, given U.S. Steel's highly cyclical business model. Investors need to ask whether the Street has priced in significant earnings compression for U.S. Steel through the cycle. Our analysis could surprise you. Thus, investors should wait patiently for the "bust" opportunity to arrive before considering adding exposure. We discuss the valuation and price levels that investors should watch to assess such an opportunity. Thesis We present a timely update to our previous article on United States Steel (X) as worsening economic headwinds have accelerated. The Fed's hawkish stance in accelerating its rate hikes has increased fears that it could bring the economy to its knees, driving it into a hard landing in 2023. As a result, we believe the market has been pricing in these headwinds accordingly into economically sensitive stocks like X, given their highly cyclical business model. It's critical for investors to assess whether the recent pullback from its August highs warrants adding more positions as X goes through the cycle. Our analysis suggests it's still too early to add more exposure, as we have not yet gleaned significant earnings compression in the consensus estimates. Notwithstanding, the market has already started anticipating further cuts, as it justifiably de-rated X, despite a remarkable Q2. Investors need to note that the market is forward-looking. We discuss why we are not ready to re-rate X yet. We also discuss the critical price and valuation levels that investors can start getting excited with X subsequently to ride the next wave up. As such, we reiterate our Hold rating. Prepare For A Major Recession Even though the equity markets are already in the doldrums, we think Fed Chair Jerome Powell and his committee are sparing no effort to inflict more pain on the economy with their #1 goal of bringing down inflation expeditiously. Therefore, we believe the market remains in a price discovery phase as investors battle to assess whether Powell's objective could lead to a soft or hard landing for the economy. Famed Wharton professor Jeremy Siegel accentuated that the Fed is making yet another policy stumble that could cause a severe recession in 2023. He articulated: Now when all those very same commodities and asset prices are going down, [Powell] says: 'Stubborn inflation that requires the Fed to stay tight all the way through 2023.' It makes absolutely no sense to me whatsoever, way too tight. If tightening actions from the Fed continue through 2023, you can make sure that there's a major recession on the other side. - Insider Notwithstanding, Princeton economics professor Alan S. Blinder highlighted in a recent commentary that it's not all doom and gloom, and we shouldn't write off the Fed yet. He stressed in a recent commentary that "landing the economy softly is a tall order, but success is not unthinkable. The Fed has done it before." Blinder articulated: A careful historical analysis suggests, however, that the Fed has a much more encouraging record. By my reckoning, it managed a soft landing or came close in six of the 11 cases. In the other five, it was either not trying to land the economy softly-because a hard landing was needed to crush high inflation-or its policy was overwhelmed by events out of the Fed's control. - WSJ Therefore, we believe the price discovery in the market leading to volatility will likely continue as the bulls and bears battle their conviction. Undoubtedly, the initiative remains with the sellers, betting that Powell and his team will unlikely achieve a soft landing, given the malaise in the equity markets. So, Prepare For U.S. Steel's Earnings Compression U.S. Steel Revenue change % consensus estimates (S&P Cap IQ) Interestingly, the consensus estimates (neutral) suggest that X's revenue growth should slide further through 2023 before recovering. Therefore, the Street could already have priced in a significant downturn in U.S. Steel's growth momentum. U.S. Steel Adjusted EBITDA margins % and FCF margins % consensus estimates (S&P Cap IQ) However, the Street is still projecting for U.S. Steel to post adjusted EBITDA margins that are way higher than its previous significant downturns in 2016 and 2020.
Should You Be Adding United States Steel (NYSE:X) To Your Watchlist Today?
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...
U.S. Steel: Remarkable Q2, But Don't Chase This Rally
U.S. Steel reported a robust Q2 earnings print, outperforming the consensus estimates on both lines, quelling fears of a steep slowdown. The company's diversified segments helped sustain a better than expected slowdown, capitalizing on a strong energy market. Management also announced a new $500M buyback authorization. However, U.S. Steel's revenue and profitability growth could moderate markedly through FY23 if macros worsen further. While X has rallied remarkably from its July lows, we urge investors not to chase this rally. Therefore, we reiterate our Hold rating for now. Thesis United States Steel (X) posted a robust Q2 earnings release that came in well ahead of the consensus estimates. Moreover, it suggested that the panic that sent X stock tumbling from March to June was overstated, coupled with recessionary fears. We noted that X was near its support in our previous article, which could help provide a short-term respite. Notably, it also formed a bear trap (indicating the market denied further selling downside) two weeks after our July article, as X staged a remarkable recovery since its July lows. While we had expected a near-term rebound, we didn't expect the scale of it, as X outperformed the market significantly. Notwithstanding, we do not encourage investors to add at the current levels as X has reached technically overbought levels. Also, we remain concerned about a marked drop in revenue and profitability metrics moving ahead, which could put further pressure on X to regain its 2022 highs. Accordingly, we reiterate our Hold rating on X. Superb Q2 Quelled Near-Term Fears U.S. Steel posted revenue of $6.29B (up 25.2% YoY) and an adjusted EBITDA of $1.62B (up 26% YoY). The company also outperformed the consensus estimates markedly in Q2, demonstrating the strength of its diversified business segments. The company highlighted softness in consumer end markets but indicated strength in the energy markets. CEO David Burritt accentuated: I think this diverse end market exposure really does keep us insulated from having too much dependence on just one set of customers. We got automotive with 30% to 35%. Construction, 15% to 20%. Tin, something like 15%. Appliance, 10%, energies, and line pipe to 10%. Importantly, we are uniquely positioned to serve the resurging energy market from our flat-rolled, mini mill and tubular segments. We continue to see growth in today's order book for energy product while investing in capabilities to serve growing markets in the future. (U.S. Steel FQ2'22 earnings call) U.S. Steel revenue change % and adjusted EBIT margins % consensus estimates (S&P Cap IQ) Nonetheless, the revised consensus estimates (neutral) suggest that X's revenue and profitability growth could moderate further through FY23. Therefore, we believe it's important for investors to be cautious when considering adding exposure. Management also highlighted pressure from the current pricing dynamics. Outgoing CFO Christine Breves articulated: The declining steel price environment through much of the second quarter and into the third quarter has kept some buyers on the sidelines. This is expected to result in sequentially lower EBITDA for our Flat-Rolled segment. Spot prices falling from high levels over the past several months are expected to negatively impact results in the third quarter. (U.S. Steel earnings) U.S. Steel gross margins % consensus estimates (S&P Cap IQ) US Steel CapEx consensus estimates (S&P Cap IQ) As seen above, U.S. Steel's gross margins could continue to fall through FY24, impacting its bottom line. Furthermore, the company is also expected to be investing heavily through FY23, which could put further pressure on its ability to continue its attractive stock buybacks.
Shareholder Returns
| X | US Metals and Mining | US Market | |
|---|---|---|---|
| 7D | 9.6% | 9.8% | 1.0% |
| 1Y | -9.0% | -9.6% | -20.0% |
Return vs Industry: X matched the US Metals and Mining industry which returned -9.6% over the past year.
Return vs Market: X exceeded the US Market which returned -20% over the past year.
Price Volatility
| X volatility | |
|---|---|
| X Average Weekly Movement | 8.1% |
| Metals and Mining Industry Average Movement | 8.4% |
| Market Average Movement | 6.8% |
| 10% most volatile stocks in US Market | 15.5% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: X is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.
Volatility Over Time: X's weekly volatility (8%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1901 | 24,540 | Dave Burritt | https://www.ussteel.com |
United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through four segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, strip mill plates, sheets, and tin mill products, as well as iron ore and coke.
United States Steel Fundamentals Summary
| X fundamental statistics | |
|---|---|
| Market Cap | US$4.85b |
| Earnings (TTM) | US$4.93b |
| Revenue (TTM) | US$23.11b |
1.0x
P/E Ratio0.2x
P/S RatioIs X overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| X income statement (TTM) | |
|---|---|
| Revenue | US$23.11b |
| Cost of Revenue | US$16.20b |
| Gross Profit | US$6.91b |
| Other Expenses | US$1.98b |
| Earnings | US$4.93b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 20.79 |
| Gross Margin | 29.92% |
| Net Profit Margin | 21.34% |
| Debt/Equity Ratio | 36.1% |
How did X perform over the long term?
See historical performance and comparisonDividends
1.0%
Current Dividend Yield0.858%
Payout RatioValuation
Is X undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for X?
Other financial metrics that can be useful for relative valuation.
| What is X's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$4.85b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 0.3x |
| Enterprise Value/EBITDA | 0.9x |
| PEG Ratio | -0.02x |
Price to Earnings Ratio vs Peers
How does X's PE Ratio compare to its peers?
| X PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 4.1x | ||
SIM Grupo Simec. de | 8.6x | -25.4% | US$4.5b |
CMC Commercial Metals | 4.4x | -32.9% | US$4.7b |
TX Ternium | 1.6x | -24.4% | US$5.9b |
AMR Alpha Metallurgical Resources | 2x | -53.7% | US$2.6b |
X United States Steel | 1x | -64.9% | US$4.8b |
Price-To-Earnings vs Peers: X is good value based on its Price-To-Earnings Ratio (1x) compared to the peer average (4.1x).
Price to Earnings Ratio vs Industry
How does X's PE Ratio compare vs other companies in the US Metals and Mining Industry?
Price-To-Earnings vs Industry: X is good value based on its Price-To-Earnings Ratio (1x) compared to the US Metals and Mining industry average (6.7x)
Price to Earnings Ratio vs Fair Ratio
What is X's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 1x |
| Fair PE Ratio | 3x |
Price-To-Earnings vs Fair Ratio: X is good value based on its Price-To-Earnings Ratio (1x) compared to the estimated Fair Price-To-Earnings Ratio (3x).
Share Price vs Fair Value
What is the Fair Price of X when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: X ($20.43) is trading above our estimate of fair value ($3.7)
Significantly Below Fair Value: X is trading above our estimate of fair value.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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Future Growth
How is United States Steel forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score
0/6Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
-64.9%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: X's earnings are forecast to decline over the next 3 years (-64.9% per year).
Earnings vs Market: X's earnings are forecast to decline over the next 3 years (-64.9% per year).
High Growth Earnings: X's earnings are forecast to decline over the next 3 years.
Revenue vs Market: X's revenue is expected to decline over the next 3 years (-16.9% per year).
High Growth Revenue: X's revenue is forecast to decline over the next 3 years (-16.9% per year).
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: X's Return on Equity is forecast to be low in 3 years time (5.5%).
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Past Performance
How has United States Steel performed over the past 5 years?
Past Performance Score
6/6Past Performance Score 6/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
38.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: X has high quality earnings.
Growing Profit Margin: X's current net profit margins (21.3%) are higher than last year (6.8%).
Past Earnings Growth Analysis
Earnings Trend: X's earnings have grown significantly by 38.3% per year over the past 5 years.
Accelerating Growth: X's earnings growth over the past year (437.1%) exceeds its 5-year average (38.3% per year).
Earnings vs Industry: X earnings growth over the past year (437.1%) exceeded the Metals and Mining industry 82.4%.
Return on Equity
High ROE: X's Return on Equity (47.9%) is considered outstanding.
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Financial Health
How is United States Steel's financial position?
Financial Health Score
6/6Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: X's short term assets ($9.0B) exceed its short term liabilities ($4.6B).
Long Term Liabilities: X's short term assets ($9.0B) exceed its long term liabilities ($5.0B).
Debt to Equity History and Analysis
Debt Level: X's net debt to equity ratio (6.6%) is considered satisfactory.
Reducing Debt: X's debt to equity ratio has reduced from 114.4% to 36.1% over the past 5 years.
Debt Coverage: X's debt is well covered by operating cash flow (125.6%).
Interest Coverage: X earns more interest than it pays, so coverage of interest payments is not a concern.
Balance Sheet
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Dividend
What is United States Steel current dividend yield, its reliability and sustainability?
Dividend Score
2/6Dividend Score 2/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
0.98%
Current Dividend Yield
Dividend Yield vs Market
| United States Steel Dividend Yield vs Market |
|---|
| Segment | Dividend Yield |
|---|---|
| Company (United States Steel) | 1.0% |
| Market Bottom 25% (US) | 1.6% |
| Market Top 25% (US) | 4.6% |
| Industry Average (Metals and Mining) | 3.4% |
| Analyst forecast in 3 Years (United States Steel) | 1.0% |
Notable Dividend: X's dividend (0.98%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.64%).
High Dividend: X's dividend (0.98%) is low compared to the top 25% of dividend payers in the US market (4.63%).
Stability and Growth of Payments
Stable Dividend: X's dividend payments have been volatile in the past 10 years.
Growing Dividend: X's dividend payments have not increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (0.9%), X's dividend payments are thoroughly covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its low cash payout ratio (1.4%), X's dividend payments are thoroughly covered by cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
2.6yrs
Average management tenure
CEO
Dave Burritt (67 yo)
5.42yrs
Tenure
US$18,824,816
Compensation
Mr. David Boyd Burritt, also known as Dave, is Independent Director of Lockheed Martin Corporation from April 2008. He joined the Lockheed Martin Corporation in April 2008. He is President, CEO & Director...
CEO Compensation Analysis
| Dave Burritt's Compensation vs United States Steel Earnings |
|---|
| Date | Total Comp. | Salary | Company Earnings |
|---|---|---|---|
| Jun 30 2022 | n/a | n/a | US$5b |
| Mar 31 2022 | n/a | n/a | US$5b |
| Dec 31 2021 | US$19m | US$1m | US$4b |
| Sep 30 2021 | n/a | n/a | US$3b |
| Jun 30 2021 | n/a | n/a | US$918m |
| Mar 31 2021 | n/a | n/a | -US$683m |
| Dec 31 2020 | US$9m | US$1m | -US$1b |
| Sep 30 2020 | n/a | n/a | -US$2b |
| Jun 30 2020 | n/a | n/a | -US$2b |
| Mar 31 2020 | n/a | n/a | -US$1b |
| Dec 31 2019 | US$13m | US$1m | -US$630m |
| Sep 30 2019 | n/a | n/a | US$630m |
| Jun 30 2019 | n/a | n/a | US$1b |
| Mar 31 2019 | n/a | n/a | US$1b |
| Dec 31 2018 | US$12m | US$1m | US$1b |
| Sep 30 2018 | n/a | n/a | US$682m |
| Jun 30 2018 | n/a | n/a | US$538m |
| Mar 31 2018 | n/a | n/a | US$585m |
| Dec 31 2017 | US$5m | US$930k | US$387m |
| Sep 30 2017 | n/a | n/a | US$123m |
| Jun 30 2017 | n/a | n/a | US$27m |
| Mar 31 2017 | n/a | n/a | -US$280m |
| Dec 31 2016 | US$4m | US$800k | -US$440m |
| Sep 30 2016 | n/a | n/a | -US$1b |
| Jun 30 2016 | n/a | n/a | -US$2b |
| Mar 31 2016 | n/a | n/a | -US$2b |
| Dec 31 2015 | US$3m | US$780k | -US$2b |
Compensation vs Market: Dave's total compensation ($USD18.82M) is above average for companies of similar size in the US market ($USD8.53M).
Compensation vs Earnings: Dave's compensation has increased by more than 20% in the past year.
Leadership Team
Experienced Management: X's management team is considered experienced (2.6 years average tenure).
Board Members
Experienced Board: X's board of directors are considered experienced (5.4 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
| Date | Value | Name | Entity | Role | Shares | Max Price |
|---|---|---|---|---|---|---|
| 07 Mar 22 | BuyUS$31,500 | Terry Dunlap | Individual | 1,000 | US$31.50 | |
| 04 Mar 22 | SellUS$2,191,121 | James Bruno | Individual | 71,699 | US$30.56 |
Ownership Breakdown
| Owner Type | Number of Shares | Ownership Percentage |
|---|---|---|
| State or Government | 112,676 | 0.05% |
| Individual Insiders | 1,547,861 | 0.7% |
| General Public | 41,316,727 | 17.4% |
| Institutions | 194,249,732 | 81.9% |
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 24,060,553 | $491.6m | 0.35% | 0.01% | |||
| 22,898,261 | $467.8m | 1.34% | 0.01% | |||
| 11,683,862 | $238.7m | 0% | 1.99% | |||
| 11,526,966 | $235.5m | 0.02% | 0.01% | |||
| 9,486,686 | $193.8m | 36.12% | 0.04% | |||
| 5,607,049 | $114.6m | 109.2% | 0.02% | |||
| 5,137,332 | $105.0m | 154.04% | 0.95% | |||
| 4,157,600 | $84.9m | -10.16% | 0.22% | |||
| 3,961,258 | $80.9m | 59.72% | 5.23% | |||
| 3,835,871 | $78.4m | -7.04% | 0.05% | |||
| 3,822,448 | $78.1m | 42.08% | 0.02% | |||
| 3,714,389 | $75.9m | -1.05% | 0.01% | |||
| 3,243,148 | $66.3m | 0% | 0.01% | |||
| 3,233,648 | $66.1m | 163.48% | 0.13% | |||
| 2,818,000 | $57.6m | 7.97% | 3.32% | |||
| 2,735,203 | $55.9m | -50.68% | 0.1% | |||
| 2,661,138 | $54.4m | -19.6% | 0.06% | |||
| 2,555,249 | $52.2m | 0% | 2.04% | |||
| 2,456,044 | $50.2m | 195.14% | 0.57% | |||
| 2,347,720 | $48.0m | -1.32% | 0.01% | |||
| 2,281,759 | $46.6m | 189.09% | 0.11% | |||
| 2,114,803 | $43.2m | -10.79% | 1.17% | |||
| 1,883,328 | $38.5m | -5.14% | 0.01% | |||
| 1,812,867 | $37.0m | -23.32% | 3.91% | |||
| 1,754,186 | $35.8m | 331.07% | 0.07% |
Company Information
United States Steel Corporation's employee growth, exchange listings and data sources
Key Information
- Name: United States Steel Corporation
- Ticker: X
- Exchange: NYSE
- Founded: 1901
- Industry: Steel
- Sector: Materials
- Implied Market Cap: US$4.847b
- Shares outstanding: 237.23m
- Website: https://www.ussteel.com
Number of Employees
Location
- United States Steel Corporation
- 600 Grant Street
- Pittsburgh
- Pennsylvania
- 15219-2800
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| X | NYSE (New York Stock Exchange) | Yes | Common Stock | US | USD | Apr 1991 |
| USX1 | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Apr 1991 |
| X * | BMV (Bolsa Mexicana de Valores) | Yes | Common Stock | MX | MXN | Apr 1991 |
| USX1 | XTRA (XETRA Trading Platform) | Yes | Common Stock | DE | EUR | Apr 1991 |
| X | SNSE (Santiago Stock Exchange) | Yes | Common Stock | CL | USD | Apr 1991 |
| 0LJ9 | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Apr 1991 |
| XCL | SNSE (Santiago Stock Exchange) | Yes | Common Stock | CL | CLP | Apr 1991 |
| X | BASE (Buenos Aires Stock Exchange) | CEDEAR EACH REP 1/3 ORD | AR | ARS | Feb 2011 | |
| XD | BASE (Buenos Aires Stock Exchange) | CEDEAR EACH REP 1/3 ORD | AR | USD | Feb 2011 | |
| USSX34 | BOVESPA (Bolsa de Valores de Sao Paulo) | BDR EA REPR 1 COM SHS USD1 | BR | BRL | Aug 2012 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/10/04 00:00 |
| End of Day Share Price | 2022/10/04 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.