BMO Capital has adjusted its outlook on Steel Dynamics (NASDAQ: NASDAQ:STLD), reducing the price target to $127 from the previous $135 while retaining a Market Perform rating on the stock.
The revision comes as Steel Dynamics provided third-quarter earnings per share (EPS) guidance of $1.94-$1.98, which falls below the firm's and the consensus estimates of $1.96 and $2.07, respectively.
This guidance also represents a decrease from the second quarter of 2024, where the company reported an EPS of $2.72.
The firm's analyst noted that Steel Dynamics did not provide specific future outlook commentary but mentioned that underlying steel demand remains steady.
Additionally, recent improvements in steel prices were acknowledged. However, the firm anticipates that the potential slow increase in sheet prices for the fourth quarter of 2024 could be partially offset by lower lagged contract prices.
Consequently, the firm expects Steel Dynamics' financial results for the fourth quarter to be relatively stable when compared to the third quarter.
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