Nucor (NUE) at 19.8 Times Earnings: What a Steelmaker Price Asks
Nucor has climbed 91% from its 52-week low of $130, and it still sits 11% under its high of $280. At around $248.38 as I write this, the stock trades at 19.8 times trailing earnings, against a five-year average of 12.2. A steelmaker at 19.8 times earnings should make a careful person stop and ask which earnings are being multiplied.
That is the whole problem with cyclical stocks. A steel producer looks cheapest when profits are highest and most expensive when profits are already falling. My thesis for Nucor is that the business is well run and the cycle is favorable right now, but the price already pays for a good part of the recovery, and the forward P/E of 13.5 is less comforting than it looks.
Revenue is back where it was in 2022
Start with the sales line, because steel profits follow it. Nucor’s annual revenue was $41.5 billion in 2022, $34.7 billion in 2023, $30.7 billion in 2024 and $32.5 billion in 2025. That is a fall of about 26% from the peak to the trough, followed by a 6% recovery in 2025.
The latest quarter changes the picture. Revenue was $10.4 billion, up 23% from a year earlier and 9% from the previous quarter. Multiply by four and you get a $41.6 billion annual pace, which lands almost exactly on the 2022 figure. I would not treat that as a forecast, since a quarter is a quarter, but it does say the top line has come most of the way back.
Profit has not. Net income was $2.0 billion in 2025 against $2.3 billion the year before, a net margin of 6%. Operating income was $2.7 billion, an 8% margin, and gross margin slipped to 11.9% from 13.3%. So through 2025 the company sold more and kept less of it. The recent quarters look different, and that is the reason for the rally, but the full-year numbers are a reminder of how thin the base was.
Two earnings multiples that disagree
Trailing EPS is $12.53. Forward EPS, the figure analysts expect over the next twelve months, is $18.40, which is 47% higher. The trailing figure still contains weaker quarters from last year. The forward figure assumes the strong recent pace roughly holds.
That is why the forward P/E of 13.5 looks tame while the trailing 19.8 looks rich. Both are the same price. What separates them is one belief: that steel earnings keep running at the recent level. If they do, the stock is priced near a normal multiple. If they do not, the trailing number is closer to the truth, and 19.8 times is a big premium for a commodity producer.
| Metric | Now | Five-year average | Gap |
|---|---|---|---|
| P/E (trailing) | 19.8 | 12.2 | about 62% above |
| P/E (forward) | 13.5 | n/a | n/a |
| Price to sales | 1.6 | 1.1 | about 45% above |
| Price to book | 2.7 | 2.0 | about 35% above |
I put more weight on price to sales and price to book for a company like this, since both are steadier than earnings when earnings swing. Sales at 1.6 times against a 1.1 average and book at 2.7 times against 2.0 both say the same thing as the P/E: after a 91% climb, the recovery has been paid for, at least partly.
What the price implies, in arithmetic
Try three simple cases. Suppose forward EPS of $18.40 is delivered and the market pays the five-year average P/E of 12.2. The value is about $224, 10% below today’s price. Suppose the same EPS and a multiple of 15, a fair price for a business earning above its normal margin: about $276, near the 52-week high. Now suppose earnings fall back to the trailing $12.53 and the average multiple applies: about $153, 38% lower.
The gap between $153 and $276 is the range of outcomes a holder is signing up for, and it is driven mostly by one input, the steel margin. I trust that spread more than I trust any single target. It also explains why I do not read the 13.5 forward multiple as cheap. A cyclical at 13.5 times peak-ish earnings is not the same as a utility at 13.5 times steady ones.
Comparing this with how I reason about other cyclical names, the same logic applies in my piece on five energy stocks and what each depends on: the multiple is the least reliable number when the input price is moving.
Who is buying it, and at what price
Ten analysts cover the stock, and 80% rate it a Buy. The average target is $287, which is 15% above $248.38. The lowest target is $256, only 3% above the current price, and the highest is $308, 24% above.
I read that spread as informative. When even the bearish analyst has a target above the price, and the range is only 3% to 24%, it tells me the market expects the good period to last a while. That is a different thing from safe. Analysts on a cyclical tend to raise targets as earnings rise and cut them after the peak, which means the consensus is usually most bullish at the wrong moment. I do not hold that against them; that is how estimates work. I just would not lean on it.
The dividend is $2.23 per share over the last twelve months, a 0.90% yield. That is low for a steel company. Buybacks would add to cash returned, but I have no verified buyback figure for this period and will not guess one. If you want income, look elsewhere.
Short interest is 1.8% of shares, which tells me nobody is making a large bet that the rally fails.
How the market reacted to the last report
Nucor reported on July 27, and the shares rose 7.2% that day. The average earnings-day move is 4.9%. So the last report was a bigger surprise than usual, and in the good direction. That is consistent with everything above: the market is paying attention to the margin recovery and rewarding it.
It also means the next report carries more risk than an average one. A stock that has moved 91% from the low and rose 7.2% on the last print has raised what it needs to show. If the next quarter is merely as good as the last one, the reaction could be muted or negative, because the price already includes that.
A price that doubled in a year
The 52-week range runs from $130 to $280, so anyone who bought at the low has nearly doubled their money, and anyone who bought at the high is down about 11%. That width is unusual for a company with a market value of $56.4 billion. It tells me the market has been repricing steel earnings in big steps, and stocks that reprice in steps tend to keep doing it in both directions.
A holder today is not buying the recovery. The recovery is done in the price. What remains for a new buyer is the second half of the story: earnings that keep rising from an already higher base. That is a harder bet than the one that worked between $130 and $248, and it deserves a smaller position.
I would also keep in mind how little the dividend cushions a fall. At a 0.90% yield, a 20% decline in the share price takes about twenty-two years of dividends to earn back. That is plain arithmetic, and it puts the risk in proportion.
What would prove me wrong
I would be wrong if steel prices and volumes hold at the current level for several more quarters. In that case forward EPS of $18.40 gets delivered and possibly raised, and the case for a multiple of 14 or 15 becomes reasonable, which would put the stock in the high $200s. I would need to give up the idea that the recovery is fully priced.
The uncertainty I cannot remove is the timing of the cycle. I do not know what steel demand will do in the next two quarters, and no one publishing a target does either. The data I have, sales, margins and multiples, describe where the company is. They do not say where it goes.
There is also a plainer risk: gross margin fell from 13.3% to 11.9% in 2025 even while revenue grew 6%. That shows how quickly costs can absorb a sales gain in this business. If the current pace of revenue growth continues but margins do not improve, then earnings will not reach $18.40 and the multiple will have to fall.
The numbers I would follow next
I would watch quarterly EPS against the $4.60 average implied by the forward figure ($18.40 divided by four). Two quarters at or above that level would tell me the forward estimate is safe. A quarter near $3.13, which is the trailing $12.53 divided by four, would tell me the cycle is turning and the trailing multiple is the one to take seriously. I would also pair that with gross margin, which has to stay above the 2025 level of 11.9% for the story to work.
If I were building a position, I would keep it small, since a cyclical up 91% is one that can give back a lot. I would add on a pullback toward $224, the value under the average multiple. My note on how I size a position when volatility is high covers how to think about the amount, and the Microsoft valuation post shows what a steady compounder looks like at a similar multiple for contrast.
Analysis and opinion only, not investment advice. Figures come from Nucor’s filings on SEC EDGAR and its investor site; market data and valuation multiples are approximate and were checked on September 18, 2026.