Why Steel Dynamics Stock Is Up Today
A planned share buyback by Steel Dynamics (NASDAQ: STLD) has at least one Wall Street analyst upbeat on the company's outlook, and his optimism is spreading to investors. Shares of the steel manufacturer traded up as much as 6.4% on Monday after the analyst boosted his price target on the stock.
Steel Dynamics has been a solid performer in 2022, with the shares up more than 60% despite energy headwinds and questions about the health of the broader economy. The company appears confident that it has what it takes to navigate the current environment, last week announcing a new $1.5 billion share buyback.
BMO Capital analyst David Gagliano notes that the buyback comes at a tricky moment for steel producers, with demand in doubt due to a slowing economy and higher capital expenditures on the horizon. Gagliano wrote that the decision is an indication that Steel Dynamics has ample cash on hand and expects to remain free cash flow-positive in the coming years.
Source Fool.com
