STLD
Steel Dynamics, Inc.$189.98
Sell
Target $137.88
Report: Mar 13, 2026Basic Materials • Steel • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$189.98-27.4%
Rec: SellConviction: Low
Entry Target
N/A
N/A
Fair Value
$137.88
(27% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$208.47
52 Week Low$103.17
Avg. 3 Month Volume1.31M
Efficiency
LTM Gross Margin13.2%
LTM EBITDA Margin11.6%
LTM EBIT Margin8.6%
LTM Operating Margin8.1%
LTM ROA7.4%
LTM ROE13.3%
LTM ROIC9.5%
LTM ROCE11.4%
Capital Structure
Market Cap (MM)$26.1B
Enterprise Value (MM)$29.5B
Shares Outstanding145.63M
Total Debt (MM)$4.21B
Cash & Equivalents (MM)$769.88M
LTM Net Debt (MM)$3.44B
LTM Net Debt/EBITDA1.6x
Growth
TTM Rev. Growth3.6%
Last 3-Yr Rev. CAGR-6.5%
Last 3-Yr EBITDA CAGR-27.2%
Last 3-Yr EPS CAGR-27.4%
Valuation
Street Target Price$179.00
LTM EV/Revenue1.6x
LTM EV/Gross Profit12.3x
LTM EV/EBIT18.9x
LTM EV/EBITDA14.0x
LTM P/E22.0x
LTM EV/FCF58.9x
LTM P/FCF52.0x
LTM P/TB1.7x
LTM P/B2.9x
Dividend Yield1.1%
Payout Ratio24.9%
Executive SummarySituation: Current price is $189.98 versus fair value $137.88 (-27.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Aluminum reaches 90% utilization by end-2026, shifting to higher-margin mix post-certifications and adding $650-700M through-cycle EBITDA; addresses market skepticism on ramp losses ($173M FY2025) by validating $1.4B new-investment capab... Bear case centers on Prolonged 'lower-for-longer' downturn erodes spreads further, with aluminum delays amplifying $173M losses and compressing FCF to negative as in FY2024 (-$23.5M). Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Aluminum ramp accelerates to 90% utilization by 2026 adding $650-700M EBITDA on 49% sales surge; record 13.7M ton steel shipments and full-capacity coating lines expand metal spreads; $900M 2025 buybacks shrink shares 1.1% at 11-22/100 valuation percentile yielding 16-45% ROI.
Bear Case
Steel metal spreads narrowed 2% with operating margins compressing 300bps to 8.1% and aluminum $173M loss; peers like CLF/X show negative growth/margins signaling deeper trough; $948M capex drains FCF to 2.8% margin amid 3.6% revenue growth.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Aluminum reaches 90% utilization by end-2026, shifting to higher-margin mix post-certifications and adding $650-700M through-cycle EBITDA; a...
Near-Term (0-6 months)Impact: High
Macroeconomic inflection via tariffs/infrastructure turns steel spreads, with 86% utilization and supply discipline supporting mid-cycle 12%...
Long-Term (18+ months)Impact: Moderate
STLD trades at trough 1.8x P/TB amid repair cycle, with aluminum positivity confirmed Dec 2025 and Q3 earnings beat (+4.2% EPS) driving 24%...
Primary Risks
Concern: High
Prolonged 'lower-for-longer' downturn erodes spreads further, with aluminum delays amplifying $173M losses and compressing FCF to negative a...
Concern: Medium
Balance sheet strain from $948M capex if cycle deepens, breaching 2.5x interest covenant (current 13.3x) or forcing dilution.
Concern: Medium
Strong stewardship with majority independent board (60%) featuring cyclical experts (ex-NOVA CEO Sierra, rail CFO Hamann) and PE/M&A Chair S...
Recent Activity
2025-10-21SEC Filing (8-K)
+5.15%Steel Dynamics reports Q3 2025 results with aluminum milestone
2025-09-16SEC Filing (8-K)
+6.15%Steel Dynamics provides Q3 2025 earnings guidance
2023-01-26SEC Filing (8-K)
+9.99%Steel Dynamics amends bylaws to include proxy access provisions
2022-10-21SEC Filing (8-K)
+8.49%Steel Dynamics reports record Q3 2022 results
2022-10-20Analyst Estimate
+6.16%EPS Beat/Miss: +7.3% - Actual: $5.46 - Estimated: $5.09 Revenue Beat/Miss: +2.3% - Actual: $5,651,707,000 - Estimated: $5,523,565,253
Valuation Table
9.8/10Decision Grade
Scenario Range
$86
Bear
$151
Base
$219
Bull
$190