Heavy Reinvestment and Lower Margins Loom For U.S. Steel After Strong 2018; Lowering FVE To $21
Having updated our valuation model for U.S. Steel, we've lowered our fair value estimate to $21 per share from $25. Our no-moat rating is unchanged. Our fair value falls due to lower near- and medium-term profit forecasts as well as an increased cash burn versus our prior expectations. A key element of our lower profit outlook is our forecast for weaker profits in the U.S. Steel Europe operations, which had been a notable bright spot for the company as a whole over the trailing three years.Rega...
United States Steel is a steel producer of flat-rolled and tubular products with production operations in the United States and Europe. The company is also engaged in railroad services and real estate operations. The company's segments are: North American Flat-Rolled, which produces slabs, strip mill plates, sheets and tin mill products; U. S. Steel Europe, which produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as heating radiators and refractory ceramic materials; and Tubular Products, which produces and sells electric resistance welded steel casing and tubing (known as oil country tubular goods), and standard and line pipe and mechanical tubing.
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