Steel stocks on the rise are one telltale sign that the Trump administration’s recent trade policies are starting to favor the performance of domestic manufacturers. These policies also trigger volatility trends in stocks affiliated with trade partners. One such stock performance improvement is playing out in the US steel market.
Three local industrial metal producers stand out this week. The companies hope that the rising steel stocks will continue on that trajectory. Once this momentum of positive stock performance holds steady, investment opportunities may open up in the coming month.
The steel stocks on the rise are a product of sheer luck. Apparently, Wall Street analysts are selling the viability of stocks belonging to the local manufacturing sector to investors.
A market analysis of the prevailing commodity trends suggests that the local manufacturing sector is bound to drive economic growth. Economic growth will likely open up more investment opportunities and serve as an opportunity for portfolio diversification.
The three steel market stocks coming under the radar are Cleveland-Cliffs Stock (NYSE: CLF), United States Steel Co. (NYSE: X), and Ternium (NYSE: TX). Let’s see how each of these three Steel stocks on the rise could revolutionize your investment portfolio.
1. Cleveland-Cliffs Stock
Cleveland-Cliffs has been an underdog on the stock market for a long while. However, things are about to change for the industrial metals producer. At the moment, the Cleveland-Cliffs stock is selling at 44% of its all-year projected high. This has made this promising stock an eye-catcher for potential upgrades.
President Trump has instituted the right conditions for domestic manufacturers to receive a major boost. The Trump 2.0 policies have basically kept interest rates low and slapped tariffs on trading partners. Consequently, local manufacturers are poised to have a massive comparative advantage.
Market analysis reveals that Cleveland-Cliffs stock has galloped in the past month. The steel maker’s stock outperformed even the S&P 500 index by about 7%. Naturally, this stock will be the focus of market watchers and bullish investors.
Wall Street analysts pushed for an estimated price target of $16.9 for each unit of Cleveland-Cliffs stock on Thursday. That price is a whopping upgrade of 69.2% relative to the trading price on the same day. You could not get a better deal on your stock investments in the first few weeks of 2025.
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2. United States Steel
It is no longer news that the Japanese Nippon Steel Co.’s efforts to take over United States Steel (USS) were unsuccessful. However, the buzz the Nippon deal created must have made it common knowledge that USS shares are really cheap.
So, shareholders would probably be reluctant to part with their shares. They would rather wait for the new commodity trends in the steel market to work to their advantage.
This shareholder perception probably explains the sharp contrast in the value of USS stock in the past three quarters and today. However, the future looks promising, as the stock’s rock-bottom value will make eventual earnings per share quite significant.
The year-on-year estimate of the earnings per share on the USS stock is pegged at $0.96, courtesy of Wall Street analysts. The value of this same USS stock on Thursday was $0.56, which would be a 71.5% climb if the Wall Street projections materialize.
3. Ternium Stock
On Thursday, Tertium stock traded at 66% of its all-year high. Nonetheless, it remains a premium investment relative to the other regular shares in the steel industry. The industry’s average price-to-earnings(P/E) ratio was 19.4x on Thursday, while the P/E ratio of Ternium stock was a massive 73.3x on that same day.
Why is Tertium’s P/E ratio so high? Some key trend followers must have noticed something the majority did not. Bird-eyed investors must have observed that Chinese manufacturing activities have increased in the past three months. Consequently, it is a no-brainer that the probability of China’s, and indeed global, demand for steel spiking is high.
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The logic still doesn’t add up? Ternium S.A. is a significant steel manufacturer with major concerns in the Americas and a small US footprint. China sources the major bulk of its steel from Ternium’s Brazilian sister. Meanwhile, it all affects a single share (NYSE: TX) on the US stock exchange.
The above analysis explains the 87.5% upside on Ternium shares, for which Wall Street analysts have set a price target of $55.
The prime goal of all stock investments is to make returns that beat the onslaught of inflation. The three steel stocks on the rise are one of the best specimens for such an investment dynamic, particularly in the steel industry.