Freedom Broker opened an investment idea on Nucor with nearly 9% upside potential

Freedom Broker analysts believe the drop in Nucor Corporation (NUE) shares after the release of the third-quarter outlook was excessive and recommend buying the stock of North America’s largest steel producer. The experts’ target price is $270, implying upside of about 8.9% versus the current price of $247.9.

Nucor is a steel company

Nucor produces flat-rolled and long products, rebar, steel structures, and other steel products for construction, energy, industrial, and automotive sectors. The company also processes scrap metal and is the largest recycler in North America. 

The market reacted too sharply to the outlook

Although Nucor’s outlook for the third quarter of 2026 came in below the analysts’ consensus forecast and triggered a 7% decline in the stock over two trading sessions, we believe this market reaction was excessive, Freedom Broker analysts noted.

Nucor expects to earn diluted EPS of $5.55 to $5.65 in the third quarter. In the second quarter, the figure was $5.04, and adjusted EPS was $4.84. For comparison, in the third quarter of 2025 the company earned $2.63 per share.

In Nucor’s steel mills segment, the company expects to increase profit thanks to higher average selling prices with stable sales volumes. In the steel products segment, higher volumes and prices should have a positive impact. At the same time, profit in the raw materials segment may decline due to lower prices and shipments.

Second-quarter figures

In the second quarter, the steel mills segment results included a $130 million reversal of raw-material procurement costs from prior periods. No such benefit is expected in the third quarter. In addition, in the second quarter the company recorded a non-cash pre-tax gain of $61 million, or $0.20 per share, thanks to the revaluation of its investment in fusion-energy company Helion.

In the second quarter of 2026, Nucor’s net earnings rose to $1.16 billion, or $5.04 per share, from $743 million, or $3.23 per share, in the prior quarter and $603 million, or $2.60 per share, a year earlier. Adjusted earnings totaled $1.11 billion, or $4.84 per share, revenue was $10.40 billion, and EBITDA was $2.02 billion. The improvement was driven by higher prices and sales volumes in the steel mills segment.

Freedom expects earnings above Nucor’s guidance

Freedom Broker points out that Nucor regularly beats its own guidance. Since the fourth quarter of 2016, the company’s actual EPS has, on average, been 13% above management’s forecast, with a median beat of 11%.

On this basis, the analysts suggest that the current management guidance may be conservative. Freedom Broker expects Nucor’s third-quarter earnings to reach $6.45 per share, up 117% year over year. This result would be above the верхней limit of the company’s guidance of $5.65. Full-year 2026 EPS is estimated at $20.55.

Nucor is also supported by hot-rolled coil (HRC) prices. They are near $1 300 per ton—the highest level since the second quarter of 2022. Analysts consider high prices a sustainable driver of steel mills segment earnings through year-end.

Buybacks support the share price

Since the start of the third quarter, Nucor has repurchased about 2.03 million of its own shares at an average price of $247.04. The pace of buybacks is roughly double the levels seen in 2024–2025.

In total, since the beginning of the year the company has returned about $1.36 billion to shareholders through share repurchases and dividends. According to Freedom Broker, Nucor’s activity signals management’s confidence in the business outlook and provides additional support for the stock near the average repurchase price. The shares’ dividend yield is 1.4%.

What risks remain

Freedom Broker recommends monitoring the ramp-up pace of Nucor’s new plant in West Virginia to design capacity. Among other risks, the analysts cite further deterioration in the scrap-processing economy and a possible slowdown in hot-rolled coil price growth. Nucor plans to publish its full third-quarter report after the market close on October 26. 

Target price dynamics

Earlier, Freedom cut Nucor’s 12-month target price from $305 to $285 and downgraded the rating from “Buy” to “Hold.” The new “Buy” recommendation with a $270 target is a separate short-term investment idea aimed at a rebound in the stock after the guidance-driven decline.

In the first quarter of 2026, Nucor’s revenue grew 21% year over year and 24% quarter over quarter to $9.5 billion. Diluted EPS reached $3.23, and adjusted EBITDA was $1.51 billion. After these results were published, the company’s shares gained 4.7%.

This is not an individual investment recommendation.