Goldman Sachs has initiated coverage on two major U.S. steel companies with Buy ratings, highlighting sustained higher prices fueled by section 232 tariffs that constrain imports. The bank expects robust demand from infrastructure projects and pockets of private non-residential construction.
Nucor Corp – Goldman Sachs gives Nucor a Buy rating with a 12-month price target of $210. As the largest U.S. steel producer and scrap recycler, Nucor benefits from vertical integration, cost control, and structural advantages, positioning it to outperform through rising end-market demand, import share gains, and volume expansion. First-quarter 2026 earnings guidance is $2.70–$2.80 per share, up across all segments.
Commercial Metals – Also initiated with a Buy rating and a 12-month target of $74, Commercial Metals is a key steel rebar producer for construction. It leverages non-residential and infrastructure growth, diversifies its product mix, and expects its construction solutions segment to exceed 25% of segment EBITDA by 2028. The company recently reported Q2 2026 adjusted earnings of $1.16 per share, with revenue beating forecasts at $2.13 billion.
Goldman Sachs favors lower beta companies poised to accelerate free cash flow, expand margins through product diversification, and capture growth in high-demand regions. Both firms are seen as structurally advantaged for navigating the U.S. steel market’s current environment.
Frequently Asked Questions
What drove Goldman Sachs to initiate coverage on these U.S. steel companies?
Higher steel prices due to section 232 tariffs and constrained imports, combined with expected demand growth in infrastructure and construction.
Why is Nucor considered structurally advantaged in the steel market?
Nucor’s vertical integration, scrap recycling, cost control, and volume expansion capabilities allow it to maintain higher through-cycle margins than peers.
What factors support Commercial Metals’ Buy rating?
Strong North American demand, product diversification, margin expansion, focus on cash flow, and exposure to high-growth U.S. regions.
How are Nucor and Commercial Metals positioned for future earnings growth?
Nucor benefits from rising end-market demand and free cash flow harvesting, while Commercial Metals leverages infrastructure growth and its construction solutions segment expansion.
What recent financial results did Commercial Metals report?
Q2 2026 adjusted earnings of $1.16 per share, missing analyst forecasts, with revenue at $2.13 billion, exceeding expectations.
