2Q Results: Beat & Constructive Outlook Supported by Diversification & Utilization Upside; Remain OW-Rated

Research evidence excerpt

2Q Results: Beat & Constructive Outlook Supported by Diversification & Utilization Upside; Remain OW-Rated

282).

• Company guidance: Into 3Q, Mills should benefit from “stable” shipments Quarterly Forecasts (FYE Dec)

and improved pricing “across all product groups” more than offsetting higher Adj. EPS ($)

2025A 2026E 2027E

conversion costs without 2Q’s cash refund. Steel Products should rise on Q1 0.77 3.23A 4.74

improved shipments/pricing. Raw Materials faces weaker pricing and higher Q2 2.61 4.84A 5.53

DRI pellet costs, while corporate eliminations should remain steady. FY26 Q3 2.64 5.68 5.22

capex guidance was unch. ($2.5B; 60% growth) with less WC use in 3Q and Q4 1.74 4.43 3.83

FY 7.76 18.17 19.32

potential 4Q source. On the market, CEO Leon Topalian outlined FY26 sheet

imports ~50% below FY24 levels, implying ~4.5Mt of additional addressable Style Exposure

market or closer to ~6.0Mt when accounting for demand growth. The team also

forecast real demand growth at 2% (or greater) in the years ahead supported by

megatrends, with muted auto/consumer offset by reshoring trends driving

greater net steel consumption.

• Market update: The HRC import arb has been open since May’26, but NUE’s

disciplined weekly CSP (+$10/t W/W) is “changing volatility in the market.”

Said another way, the gradual CSP rise YTD and recent pauses have limited

speculative imports from flooding the market, with importers likely concerned

of ‘catching a falling knife’ although investors have begun to discount post-

peak pricing. While we anticipate import arrivals ramp later this year and into

next, we feel the sector’s relative safe-haven status with re-escalation in the

Middle East and better-than-seasonal 2H pricing (muted peak-to-trough)

remain underappreciated (link).