Nucor (NUE) Consolidates Ahead of Earnings: $145 Resistance Looms

Nucor Corporation (NYSE: NUE), a bellwether of the steel industry, is poised to release its third-quarter 2025 today, after market close. NUE is currently up 2.3% early today, bringing cumulative gains of 5% in the last five days. The stock price reflects a period of consolidation ahead of the highly anticipated earnings report, with near-term resistance appearing to be firmly established around the $145 mark.

Analysts project that Nucor will report EPS of $2.16, more than double last year’s $1.05, indicating a significant increase in profitability. Revenue is expected to reach $8.15 billion, reflecting a 9.54% year-over-year growth, signaling strong demand for steel products and continued operational strength.

The Steel Mills segment is expected to face lower earnings due to reduced volumes and margin compression. The Steel Products segment anticipates a decline stemming from higher average costs per ton, despite stable pricing and volumes. Finally, the Raw Materials segment forecasts lower profitability in scrap processing operations.

Analysts, however, appear largely optimistic. The consensus rating for NUE is a “Strong Buy,” with a 12-month average price target of $156.33, suggesting a potential upside of approximately 16%. This bullish sentiment is further supported by Zack's Investment Research, which notes that NUE has outperformed both the Basic Materials sector and the broader S&P 500 over the past month. Analysts are projecting earnings per share of $2.16 and quarterly revenue of $8.16 billion, representing a substantial year-over-year increase.

Nucor's capital allocation strategy remains a key area of focus. During the third quarter, the company repurchased approximately 0.7 million shares at an average price of $140.46 per share. Year-to-date, Nucor has repurchased approximately 4.8 million shares at an average price of $126.26. Combined with dividend payments, the company has returned approximately $985 million to stockholders in 2025, signaling management's confidence in the company's long-term prospects.

However, a contrarian viewpoint warrants consideration. While analysts are projecting strong year-over-year growth, the sequential decline in earnings is a cause for concern. The steel industry is inherently cyclical, and Nucor's performance is closely tied to broader economic conditions. If a recession were to materialize, demand for steel could plummet, leading to further margin compression and potentially undermining the bullish consensus.

Furthermore, increased global steel production capacity, particularly from China, could put downward pressure on prices, impacting Nucor's profitability. The company's reliance on scrap processing also exposes it to volatility in scrap metal prices, which can fluctuate significantly based on geopolitical events and supply chain disruptions. The market's reaction to the second quarter earnings, where a revenue miss led to a significant stock decline, underscores the potential for negative surprises, even when EPS expectations are met.

The market's initial reaction to the second quarter earnings provides a cautionary tale. Despite beating EPS estimates, the stock experienced a significant decline following a revenue miss, highlighting the market's sensitivity to top-line growth and future guidance. This suggests that one should pay close attention to Nucor's revenue figures and management's commentary on the demand outlook for the remainder of the year.

The upcoming conference call will be crucial for markets to gain a deeper understanding of Nucor's strategic outlook. Management's commentary on pricing trends, cost management initiatives, and capital allocation plans will provide valuable insights into the company's ability to navigate the current challenges and capitalize on future opportunities.