NUE — Nucor Corporation

Q2 2026 revenue rose 23% YoY to $10.40B, EPS jumped to $5.04 from $2.60, steel-mill earnings climbed 84.5%, and Wells Fargo, Barclays, and BMO all raised targets to ~$295-297 after the print. The August pullback was trade-policy noise, not earnings deterioration; the consensus remains Buy with an average target around $267.5-$281.8.

The last twelve quarters show a textbook cyclical recovery. Revenue bottomed around $7.1B in Q4 2024, recovered to $8.5B by mid-2025, then accelerated sharply to $9.5B in Q1 2026 and $10.4B in Q2 2026. Operating margins bottomed near 4.1% in Q1 2025 and expanded to 15.7% in Q2 2026, while free cash flow swung from -$495M in Q1 2025 to +$829M in Q2 2026. This is a sustained inflection, not a one-quarter blip.

Trailing valuation is rich: 20.1x TTM P/E and 1.59x P/S versus 5-year averages of 10.9x and 1.01x. But the TTM P/E reflects mid-recovery EPS of $12.64; with forward EPS near $18.29, the stock trades at roughly 13.8x next-year earnings. That puts NUE in fair-to-slightly-rich territory - the valuation context is 'Rich vs. its own history' on trailing data, but not absurd on forward earnings.

At $252.37 the market is pricing in continued cyclical improvement, not a blow-off peak: 13.8x forward EPS is below the 14.6x implied by the average analyst target. If the Q2 annualized run-rate near $20 becomes the new baseline, estimates move up and the stock can grind toward $270-290. If steel prices roll over and forward EPS slips back toward $15, the stock is suddenly ~17x forward earnings with no valuation cushion. This is an earnings-driven re-rating story - watch quarterly steel margins and guidance more than daily charts.

As of 2026-08-27, RSI is neutral at 48.1, price is 3.7% below its 20-day SMA, 2.1% above its 50-day SMA, and 24.5% above its 200-day SMA. That is a pullback within an uptrend after fading from the $280 high; the stock is sitting near the 50-day and needs to reclaim the 20-day to signal the dip is complete. A close below the 50-day would open the door to a deeper test.

• Industrial reshoring, grid/energy investment, and federally backed infrastructure spending are structurally lifting domestic steel demand.
• Section 232 tariff and trade-policy uncertainty - particularly potential U.S.-Canada import adjustments - creates periodic pricing/volume shocks.
• Spot sheet steel pricing remains volatile, and Nucor's raw materials segment is sequentially moderating, adding mixed signals.
• Nucor's EAF model gives it a structural cost and carbon advantage, which matters increasingly as environmental regulation tightens.
• Interest rates and construction/energy capex cycles directly drive steel consumption and project timing.

• Q3 2026 earnings and management guidance - the key test of whether record steel-mill shipment volumes can hold into fall construction season.
• Execution of the $860M capital reinvestment program, with two-thirds aimed at near-term operational integration over 24 months.
• Resolution or escalation of U.S.-Canada trade/tariff talks affecting metal import restrictions.
• Continued infrastructure and energy project starts pulling long-dated steel demand forward.

• Steel price cyclicality: a downturn in sheet steel pricing could compress margins faster than consensus expects.
• Softer tariff enforcement or looser import restrictions would pressure domestic volumes and pricing.
• Rich trailing valuation leaves little cushion if forward EPS estimates are cut; the low analyst target is $224.
• Elevated capex and cost inflation could keep free cash flow below the level needed to support a 14-15x forward multiple.
• Execution risk on new capacity expansions, which could delay the ROIC improvement embedded in the thesis.

Nucor is a high-quality, low-cost EAF steel leader with a strong balance sheet, record shipment momentum, and a clear cyclical upswing, but after a 90% run off the 52-week low it is no longer a bargain. On dips near the 50-day I'd be a selective buyer, targeting a ~9% upside to my $274 fair value; chasing strength above $260 without fresh earnings confirmation offers a poor risk/reward in the near term.

Applied a 15.0x forward P/E multiple to estimated next-FY EPS of $18.29 - a justified premium to Nucor's 5-year average P/E of 10.9x given cyclical recovery, record shipments, a strong balance sheet, and EAF/reshoring advantages - yielding $274.35.