What changed
$STLD — AVOID 📊
Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States.
🎯 Q1 FY26 | Rev $5B | EPS $2.78 vs $2.79 🔴
💡 The market appears to price in sustained high steel prices and above-trend earnings growth. In contrast, we view current profitability as near cycle peak, and expect eventual mean reversion in both steel spreads and the multiple. Consensus may be underestimating the fragility of current margins.
📉 Reward/Risk: 0:1
🏢 Business Quality: 7/10 - Best-in-class EAF steelmaker with cost advantages, strong balance sheet, and shareholder returns, but inherently cyclical and commodity-price dependent.
📊 Valuation: rich - P/E 28.8x TTM (vs industry 10-15x mid-cycle), EV/EBITDA 12.9x annualized, FCF yield likely below 5%; peer cyclicals trade at 6-10x EV/EBITDA.
📊 Our read: AVOID. Full analysis →
https://stockduty.xyz/s/STLD0619
Also in play: $INTC $AMD $MRVL $SWKS $QRVO $TSM
Why it matters
Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States.