Q2’26 preview: earnings inflection accelerates; valuation caps upside

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Q2’26 preview: earnings inflection accelerates; valuation caps upside

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North American Steel

Q2’26 preview: earnings inflection

accelerates; valuation caps upside

Price Objective Change

Price strength drives upside; updating estimates & POs 12 June 2026

Ahead of the Q2’26 guidance releases anticipated next week from Nucor (NUE) and Equity

Steel Dynamics (STLD), we mark-to-market (MTM) our Q2 steel price forecasts and North America

update our estimates and Price Objectives (PO) for our North American (NA) Steel and Metals and Mining

Metal Service Centers coverage. Tight supply (year-to-date flat-rolled steel imports Lawson Winder, CFA >>

down ~40% year‑over‑year) and persistent demand strength from re-shoring, Research Analyst

infrastructure spend, and AI datacenter capex, support recent pricing strength. We now Merrill+1 416Lynch369 7592(Canada)

model aggregate sector EBITDA up 34% quarter‑over‑quarter (QoQ) to $4.1bn in Q2’26 lawson.winder@bofa.com

and +24% QoQ to $5.1bn in Q3, versus $1.4bn trough in Q1’25. Sathish Kasinathan

Research Analyst

BofAS

+1 646 855 2769Q2 guide likely to beat; further consensus upgrades for Q3

sathish.kasinathan@bofa.com

Our revised Q2’26 estimates are largely unchanged, but we lift Q3 aggregate sector

Adam Smiarowski, CFA >>

EBITDA materially (+7% vs prior) on the lagged flow-through of recent price hikes. We Research Analyst

see potential for NUE/ STLD’s Q2 EPS guidance to be 4-8% above Bloomberg/Visible Merrill Lynch (Canada) +1 416 369 7780

Alpha consensus. More importantly, we expect further consensus upgrades, with our adam.smiarowski@bofa.com

aggregate Q3 EBITDA estimates for the sector about 20% above consensus.

Valuation expands, upside increasingly constrained Exhibit 1: Price Objective changes