Pennsylvania-based steel manufacturer United States Steel (X) expects to report adjusted EBITDA of around $2 billion in the third quarter of 2021, compared to $1.3 billion reported in the second quarter of 2021. Following the announcement, shares of the company lost 1.2% in after-hours trading on Thursday to close at $25.09.
Furthermore, the company has reduced its debt by nearly $2.7 billion, excluding the impact of the Big River Steel acquisition. United States Steel has production operations in Central Europe and the United States. (See United States Steel stock chart on TipRanks)
The President and CEO of U.S. Steel, David B. Burritt, said, “We expect the third quarter to be a quarter of records for U.S. Steel. Supported by strong reliability and quality performance, sustained customer demand, and continued increases in steel selling prices, we expect our Best for All business model to generate record quarterly adjusted EBITDA and EBITDA margins.”
On September 15, Deutsche Bank analyst Sathish Kasinathan maintained a Buy rating on the stock and raised the price target to $50 from $38 (96.9% upside potential).
In a research note to investors, the analyst said, “Since May, steel equities have largely looked through the earnings upgrades as investors have tried to avoid getting involved at the cyclical peak. This has left the sector on highly attractive valuation metrics.”
Overall, the stock has a Hold consensus rating based on 1 Buy, 1 Hold and 1 Sell. The average United States Steel price target of $40.67 implies 60.2% upside potential. Shares of the company have gained 201.9% over the past year.
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