Have you been following United States Steel (X) stock recently? The stock has increased 5.9% in the last month, indicating that shares have been moving. In the previous session, the stock achieved a new 52-week high of $36.64. Compared with the 7% increase in the Zacks Basic Materials sector and the 28% return in the Zacks Steel – Producers industry, United States Steel has increased by 45.8% since the year’s beginning.
Since it hasn’t missed our earnings consensus estimate in any of the previous four quarters, the stock has a remarkable track record of positive earnings surprises. U.S. Steel announced EPS of $1.4 in its most recent earnings release on October 26, 2023, compared to a consensus expectation of $1.15.
U.S. Steel is predicted to report earnings per share of $4.33 on $17.83 billion in revenues for the current fiscal year. This indicates a -56.48% shift in earnings per share based on a -15.37% shift in sales. It is anticipated that the corporation will generate $16.2 billion in revenue and earn $2.88 per share during the upcoming fiscal year. This indicates changes of -33.32% and -9.13%, respectively, from the previous year.
Even if U.S. Steel is now at a 52-week high, what does the stock’s future hold? Examining valuation measures to see if the firm has overrun its potential is a crucial part of this inquiry.
In this regard, we may examine the Zacks Style Scores, which provide investors an extra method of stock sorting in addition to examining a security’s Zacks Rank. In the Value, Growth, and Momentum categories, these styles are denoted by grades ranging from A to F. Additionally, there is a combined VGM Score. Investors should see the style scores as a useful resource that will assist them in selecting the best Zacks Rank companies.
U.S. Steel gets an A value rating. The company’s VGM Score is A due to the stock’s Growth and Momentum Scores of C and D, respectively.
The company is now trading at 8.4X current fiscal year EPS expectations, which is below the peer industry average of 8.8X when looking at value breakdown. The company is now trading at 2.3X on a trailing cash flow basis, whereas the average for its peer group is 3X. This is insufficient to rank the firm as the best value stock among all those we cover.
In addition, we must take into account the stock’s Zacks Rank, which takes precedence over any trend in terms of style score. Fortunately, growing earnings projections have helped U.S. Steel achieve a Zacks Rank of #2 (Buy).
It appears that U.S. Steel satisfies the standards, as we advise investors to choose companies with Zacks Ranks of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B. Therefore, it appears like there may be potential for U.S. Steel shares in the upcoming weeks and months.
Although X’s stock has been rising and the firm still seems like a good option, what about the rest of the industry? Ryerson Holding Corporation is one attractive peer in the industry (RYI). Zacks has RYI ranked #2 (Buy), with an A value score, a B growth score, and a F momentum score.
The previous quarter’s earnings were good. In the current fiscal year, Ryerson Holding Corporation (RYI) is predicted to report earnings of $2.85 per share on revenue of $5.12 billion, above our consensus estimate by 170.27%.
Ryerson Holding Corporation’s stock is now trading at a forward P/E of 8.84X and a P/CF of 2.55X, after rising 12.2% over the last month.
Even outside of their own strong fundamental position, the Steel – Producers industry appears to have some positive tailwinds for X and RYI, ranking in the top 35% of all industries in our universe.