U.S. Steel Shares Rally on 1Q Earnings Release but Massive Reinvestment Outlays Now Even Larger
U.S. Steel shares rallied sharply higher toward our fair value estimate after the company's first-quarter earnings release. However, although adjusted EBITDA rose 12% versus the prior-year period, management expects no sequential improvement in the second quarter and the company's reinvestment outlays will remain sky high over the next few years. Therefore, we see limited additional upside on a risk-adjusted basis. Having updated our valuation model to reflect the implications of the newly annou...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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