Steel Dynamics’ earnings are at an all-time high as steel stocks try to recover

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After Monday’s close, Steel Dynamics, Inc. (NADAQ:STLD) began a busy week of steel earnings. After rebounding Monday with other hard-hit steel stocks, STLD stock dropped slightly on Tuesday morning. While Steel Dynamics claimed in its earnings statement that all signs point to solid demand in 2022, it didn’t say much about steel pricing forecasts.

However, the sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

STLD stock analysis

The stock of STLD dropped 1.5 percent to $53.87 on Tuesday morning. The Stock recovered from intraday losses on Monday, finishing at $54.70, up 4.3 percent. This came after the stock of Steel Dynamics fell 15.7 percent last week, breaking through its 200-day moving average.

Source – TradingView

Since mid-August, the relative strength line for STLD stock, which records its development against the S&P 500, has been in a definite downturn. This placed doubt on the company’s failed breakout attempt from a cup-and-handle platform right before Thanksgiving.

What’s next for Steel Dynamics?

While Steel Dynamics has lagged the market so far this year, investors are wondering what the stock’s next move will be. 

There are no easy answers to this crucial question, but the company’s profits projection is one trustworthy metric that can assist investors in answering it. This includes not only current consensus earnings estimates for the next quarter(s), but also how these estimates have evolved recently.

Near-term market movements and changes in earnings estimate revisions have a substantial association, according to empirical studies. Investors can keep track of earnings estimate revisions on their own or use a tried-and-true grading tool; this method has a proven track record of harnessing the power of revisions to earnings estimates.

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