It is hard to deny the impact that Trump has had on the sentiment for the steel industry. General industrial and factory production numbers have been good, while outlook readings have been fantastic lately. It also doesn't hurt that the economy is heating up either.
However, it is really a longer-term story at play here, as the industry has been on fire for over a year. In fact, in the past twelve months, the VanEck Vectors Steel ETF (SLX) has added more than 130%, easily crushing broad benchmarks in the process.
A great stock example of this trend is definitely U.S. Steel (X) though. The company not only looks to benefit from the current administration's focus on domestic producers but it has been on a longer-term run thanks to an improving economy and better fundamentals.
U.S. Steel has actually crushed its steel brethren in the past year too, as the company has gained an outrageous 385% in the past twelve months. But even with this incredible move, there is actually plenty of room for U.S. steel to come back from a longer term perspective, and especially if we look to recent earnings estimate revisions for the company as well.
In its most recent earnings report, U.S. Steel thoroughly demolished earnings estimates. The company reported EPS of 27 cents per share, compared to estimates of one cent per share. But the earnings outlook is really what is incredible about U.S. Steel, as the company is expected to post earnings growth of over 260% this year.
And even more impressive is the company's path in terms of earnings estimates in the last few months. We haven't seen any cuts to the current year or next year outlook, while estimates have absolutely surged.
In fact, sixty days ago, the consensus estimate for X was just 84 cents a share and now it is $2.61/share. This represents a 210% increase in the consensus expectation in just two months, a truly astounding feat. It is thanks to figures like these that U.S. Steel has earned itself a Zacks Rank #1 (Strong Buy) and why there is probably enough momentum to carry this company to fresh heights in the months ahead too.
United States Steel Corporation Price and Consensus
Can Trump deliver for the steel industry and other domestic producers? That remains to be seen, but investors and analysts are definitely betting on this success to an incredible degree. Add that in to a strong economic situation and there is plenty of hope for a solid outlook.
And if investors want a top-notch company in this market, it may be hard to beat U.S. Steel. The company has a strong buy ranking, and is expected to see tremendous earnings growth too. So, don't be scared off by U.S. Steel's incredible run as of late, inspect its earnings fundamentals and give this major steel producer a closer look for your portfolio.
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