NUE - Nucor Corp - five of eight covering analysts have boosted their current-quarter estimates

Nucor Corp. (NUE) shares have been on quite a run for the last three months, advancing from their lows beneath $50 on Jan 23 to the recently established 52-week and all-time high above $75. The company reported solid first quarter results on Apr 17 in which revenue was up 32% to $4.97 billion. Nucor has also acquired two scrap metal processors this year in order to temper its exposure to higher volatility in scrap metal prices.

Nucor Corporation engages in the manufacture and sale of steel and steel products in North America. The company has a market cap. of $22.21 billion, was founded in 1940 and is based in Charlotte, North Carolina.

First Quarter Results

Nucor reported strong first quarter results on Apr 17 that included a significant jump in revenue. Net income was up 7.5% from the same period last year to $409.8 million. Revenue jumped 32% from the same period last year to $4.97 billion. This produced earnings of $1.41 per share, well ahead of analyst expectations, who were projecting earnings of $1.33 per share.

This marks the third time in the last three quarters that the company has surprised and beaten analyst estimates, having done so by an average of 10 cents, or 8%.

Guidance

Nucor provided second-quarter earnings guidance between $1.55 and $1.60 per share that has since been upgraded by the analyst community. Within the last 30 days, five of eight covering analysts have boosted their current-quarter estimates, pushing the consensus estimate 6 cents higher to its current projection of $1.70 per share.

Strategic Cost Savings Acquisitions

Nucor has mentioned that it has struggled with the challenges presented by significant fluctuations in scrap metal prices. Average scrap and scrap substitute cost per/ton jumped 29% to $333 in the first quarter. In an effort to quell this volatility, Nucor purchased scrap processor David J. Joseph Co. for $1.44 billion earlier in the year. Nucor also announced that earlier in the month it had purchased Galamba Metals Group, which operates 16 scrap-processing facilities in Kansas, Missouri and Arkansas.

In spite of the awesome run in its stock price over the last three months, Nucor shares still look very attractively priced. Projected earnings for this year are pegged at $6.59 per share. With the stock trading at $77, its forward P/E multiple is just a pinch under 12X.

The Chart

As previously mentioned, NUE shares have had a nice run over the last three months, advancing from less than $50 to their current location of over $75. In the process, a new 52-week and all-time high has been established. Just yesterday, shares finally broke above the level of resistance they had been pressuring for the last two weeks. This is a very nice short-term development. With a strong quarter behind it, and a bullish earnings projections to support share growth, this company's stock looks well positioned to continue its upward ascent. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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