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Amidst Stock Downgrade And Steel Price Drop, How Is U.S. Steel Stock Coping?

U.S. Steel Corp stock (NYSE: X) has dropped more than 14% in just the last one month and currently trades at $22 per share. The recent drop has been driven by Goldman Sachs downgrading U.S. Steel stock and the drip in steel prices. Goldman Sachs downgraded U.S. Steel stock to “sell” from “neutral” after a dip in steel prices after more than a year. Steel prices had recently reached historic highs. Hot-rolled coil prices peaked at $1,995 per ton in September 2021 from a low of $440 per ton in August 2020. But prices recently dropped to an average of $1,950 per ton, mainly due to China controlling steel production to reduce carbon emission. Plus, the general consensus in the market is that steel prices at such high levels are unsustainable for long. Additionally, U.S. Steel recently unveiled plans for a new mill that will start production in 2024. Analysts suggest that current sites of Mon Valley in Pennsylvania and Granite City, Illinois could be vulnerable to closure once the new facility is complete. But will U.S. Steel’s stock continue its downward trajectory over the coming weeks, or is a recovery in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for X stock are likely to be -0.6% in the next one-month (21 trading days) period after experiencing a 14% decline over the previous one-month (21 trading days) period. There is a 48% chance of the stock giving positive returns over the next one month. But how would these numbers change if you are interested in holding X stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test U.S. Steel stock price forecast after a rise or fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day! For additional details about U.S. Steel’s historical returns and return comparison to peers, see U.S. Steel (X) Stock Return.

MACHINE LEARNING ENGINE – try it yourself:

IF X stock moved by -5% over five trading days, THEN over the next 21 trading days, X stock moves an average of 1.2%.

Some Fun Scenarios, FAQs & Making Sense of X Stock Movements:

Q1: Is the price forecast for United States Steel stock higher after a drop?

Answer:

Consider two situations,

Case 1: United States Steel stock drops by -5% or more in a week

Case 2: United States Steel stock rises by 5% or more in a week

Is the price forecast for United States Steel stock higher over the subsequent month after Case 1 or Case 2?

X stock fares better after Case 2, with an expected return of 1.2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 3.4% for Case 2. This implies a price forecast of $22.06 in Case 1 and a figure of $22.54 in Case 2 using X market price of $21.80 on 10/13/2021.

In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.

Try the Trefis machine learning engine above to see for yourself how the forecast for United States Steel stock is likely to changes after any specific gain or loss over a period.

Q2: Does patience pay?

Answer:

If you buy and hold United States Steel stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For X stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Q3: What about the stock price forecast after a rise if you wait for a while?

Answer:

The expected return after a rise is understandably lower than after a drop as detailed in Q1. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

X stock returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for United States Steel stock by changing the inputs in the charts above.

 

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since 2016.

Invest with Trefis Market Beating Portfolios

See all Trefis Price Estimates

 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Trefis is an interactive financial community structured around trends, forecasts and insights related to some of the most popular stocks in the US. Whereas most finance sites simply give you the facts about where a stock has been and what a company has done in the past, Trefis focuses entirely on the future.

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