Steel Dynamics manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally. The company was founded in 1993 and is based in Fort Wayne, Indiana.
STLD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for STLD, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Steel Dynamics Inc ranked in the 53th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 45% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for STLD, they are:
As a business, STLD is generating more cash flow than 80.57% of positive cash flow stocks in the Basic Materials.
Steel Dynamics Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 10.27% of tickers in our DCF set.
STLD's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 10.27% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
HUN, MLM, SVM, CMP, and GLT can be thought of as valuation peers to STLD, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.
Steel Dynamics (STLD) provides Q3 2020 earnings guidance in the range of $0.42-0.46 per diluted share.Excluding the costs associated with the construction of the company's Sinton Texas Flat Roll Steel Mill of approximately $12M, EPS to be in the range of $0.46-0.50.Q2 EPS was $0.36, and prior-year Q3 EPS was $0.69.Take a look at...
When I last wrote about Steel Dynamics (STLD), I found it a little strange that the shares had been left behind in the short-cycle industrial recovery. Although I wasn’t, and still am not, all that bullish on pricing given considerable under-utilized capacity in the industry and more capacity coming online...
Stephen Simpson, CFA on Seeking Alpha | September 18, 2020
Steel plays a key role in shaping up the economy because it is a material that is extensively used in some of the top industries. During the pandemic, the performance of leading metal manufacturers like Steel Dynamics, Inc. (NASDAQ: STLD) has been relatively encouraging. Steel Dynamics ended the first half of fiscal 2020 on […]
Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced that Steel Dynamics, Inc. was recognized as the "2020 Global Steel Producer of the Year" on Thursday, July 23, 2020, during the Fastmarkets Global Awards for Steel Excellence ceremony.