Morgan Stanley has adjusted its price target for Steel Dynamics (STLD, Financial), bringing it down from $145 to $140. Despite this reduction, the analyst team, led by Carlos De Alba, maintains an Overweight rating on the stock. This decision comes as the firm updates its estimates to incorporate recent guidance from the company following its first-quarter results, along with adjustments for current steel and scrap prices.
Steel Dynamics continues to hold a strong position in the firm's portfolio, being identified as the analyst's top choice in the North American steel sector. The reassessment reflects a strategic update rather than a fundamental shift in confidence regarding the company's market performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Steel Dynamics Inc (STLD, Financial) is $145.68 with a high estimate of $155.00 and a low estimate of $128.91. The average target implies an upside of 18.93% from the current price of $122.49. More detailed estimate data can be found on the Steel Dynamics Inc (STLD) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Steel Dynamics Inc's (STLD, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Steel Dynamics Inc (STLD, Financial) in one year is $118.10, suggesting a downside of 3.58% from the current price of $122.49. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Steel Dynamics Inc (STLD) Summary page.
STLD Key Business Developments
Release Date: April 23, 2025
- Revenue: $4.4 billion, a 13% increase from the previous quarter.
- Net Income: $217 million or $1.44 per diluted share.
- Adjusted EBITDA: $448 million.
- Operating Income: $275 million, a 16% increase from the previous quarter.
- Steel Shipments: Record 3.5 million tons.
- Steel Operations Operating Income: $230 million.
- Metal Recycling Operating Income: $26 million.
- Steel Fabrication Operating Income: $117 million.
- Cash Flow from Operations: $153 million, reduced by a $165 million profit-sharing retirement distribution.
- Capital Expenditures: $306 million in the quarter.
- Liquidity: $2.6 billion.
- Capital Investments for 2025: Expected to be $800 million to $1 billion.
- Bond Issuance: $1 billion of unsecured notes.
- Interest Expense: Expected to be $40 million per quarter starting in the second quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Steel Dynamics Inc (STLD, Financial) achieved record steel shipments of 3.5 million tons in the first quarter of 2025.
- The company reported an adjusted EBITDA of $448 million, showcasing strong financial performance.
- The ramp-up of four new value-add flat-rolled steel coating lines is expected to contribute significantly to earnings later in the year.
- Aluminum Dynamics successfully cast its first aluminum ingot, with commercial quality coil shipments expected by June 2025.
- Steel Dynamics Inc (STLD) maintains a strong liquidity position with $2.6 billion available, supporting future growth and investment.
Negative Points
- The company faced a decline in average realized external steel prices by $13 per ton, impacting metal spread.
- Operating income from steel fabrication was lower due to a 4% decline in realized pricing and seasonal shipment decreases.
- Increased imports have affected demand for certain steel products, particularly coated flat-rolled steel.
- Non-capitalizable expenses related to aluminum operations increased SG&A by approximately $37 million in the first quarter.
- The company anticipates some impact from tariffs on pig iron and aluminum slab imports, which could affect costs.
