- En route to U.S. Steel's (NYSE:X) 27% crash in today's trading, CEO Mario Longhi took up more than half of his opening statement in the earnings conference call with praise for the Trump administration's decision to investigate potential national security risks of steel imports.
- Bloomberg's Liam Denning thinks it is a major reason why X's stock fell so much: Investors already had put too much faith in the power of policy to address the industry's fundamental challenges.
- Bearish Gordon Johnson at Axiom Capital agrees, saying the CEO may have focused too much on lobbying for trade cases to defend the U.S. steel industry and too little on improving operational efficiency: “They’re structurally worse off than everyone else given the age of their blast furnaces and that everyone else is in electric-arc furnaces."
- In downgrading shares to Neutral from Buy with a $26 price target, BofA Merrill Lynch cites X's dismal Q1 and guidance cut show the cost of catching up on years of under-investment.
- Other steel names seemed unaffected by U.S. Steel's swoon: NUE +1.7%, AKS +0.8%, STLD +0.7%, CLF -0.4%, MT -1.2%.
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Original article