Nucor Corp (NUE)

Conclusion

Nucor Corp is a US steel producer. Its operations span steel mills, steel products such as joists, decks and utility towers, and raw materials including direct reduced iron. At a price of 249.24 USD on 2026-11-09, the company has a market capitalisation of 56.5 billion USD and an enterprise value of 60.0 billion USD.

The verdict is overvalued. Today's multiples sit above their own ten-year medians: a P/E of 15.7 against a median of 13.3, EV/EBITDA of 8.9 against 7.0, and P/FCF of 21.3 against 13.6. The DCF gives 132.34 USD per share at a discount rate of 13.95%. The fair value band runs from 130.27 to 195.40 USD with a midpoint of 162.84 USD, giving a margin of safety of -34.7% at the current price. The fair value from historical multiples is 193.34 USD. The reverse DCF implies revenue growth of 16.6% a year, against revenue growth of 10.0% a year over five years.

What holds the case up is a balance sheet with interest coverage of 45.6 and net debt to EBITDA of 0.51, and a return on invested capital of 15.7% against a WACC of 12.8%. What would break it is weak recent growth: revenue fell at a three-year CAGR of -7.8% and EPS at -36.1%. The P/FCF premium of 56.5% over its median leaves little room for error if those trends persist.

Financial health

Financial strength is green, held up by all four measures assessed as good: a current ratio of 2.46, net debt to EBITDA of 0.51, interest coverage of 45.6 and an Altman Z-score of 5.36. The quick ratio is 1.36 and debt to equity is 0.31. The Altman Z-score of 5.36 is in the safe zone, and Nucor is a manufacturer, so the model fits its business. Insolvency risk: low, about 0.09% by the estimate of the Ohlson model over one to two years, based on figures as of 2025-12-31.

Earnings quality

Earnings quality is yellow. Free cash flow conversion is 73.9% on a trailing twelve-month basis, against 80.3% averaged over five years. The accrual ratio is -0.0432, which means reported earnings are backed by cash. Stock-based compensation is 0.41% of revenue, leaving free cash flow after it at 2.50 billion USD. The share count fell at a five-year CAGR of -5.3%, reflecting buybacks. The Piotroski score is 6 of 9, and the Beneish M-score is not available. Nucor beat earnings estimates in 7 of the last 8 quarters, with an average surprise of 19.1%. Estimate revisions are positive: the current year is up 6.0% over 90 days with seven upward and no downward revisions in the last 30 days, and the next year is up 14.6% over 90 days.

Profitability

Profitability is green. Return on invested capital is 15.7% against a WACC of 12.8%, a ROIC minus WACC of 2.9 points, so the company creates value above its cost of capital. Margins sit above their ten-year medians: gross margin 17.3% against 13.0%, operating margin 13.3% against 9.5%, and net margin 9.3% against 6.6%. The margin stability figure is 0.49. The five-year median ROIC is 25.1%, well above today's level. The DuPont split at 2025-12-31 shows a net margin of 5.4%, an asset turnover of 0.93 and an equity multiplier of 1.68. Leverage contributes little, so the trailing return on equity of 15.8% is not inflated by debt.

Growth

Growth is green. Revenue compounded at -7.8% over three years, 10.0% over five years and 7.1% over ten years. EPS compounded at -36.1% over three years, 26.1% over five years and 21.1% over ten years. Revenue grew in 5 of the 10 comparable years. Next year's EPS estimate implies growth of 8.4%. The long-run record supports the green colour, but the three-year decline is the main reason growth is not stronger.

Valuation

Valuation is red. Every multiple sits above its ten-year median: P/E 15.7 against 13.3 (a premium of 18.5%), EV/EBITDA 8.9 against 7.0 (26.8%), P/FCF 21.3 against 13.6 (56.5%), P/S 1.46 against 1.05 (38.4%) and P/B 2.48 against 2.13 (16.2%). The DCF gives 132.34 USD per share at a discount rate of 13.95%, with near-term growth of 8.4% and terminal growth of 2.5%. The fair value band runs from 130.27 to 195.40 USD, with a midpoint of 162.84 USD and a margin of safety of -34.7%. The fair value from historical multiples is 193.34 USD. The reverse DCF implies growth of 16.6% against 10.0% delivered over five years. The fair value is an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth. It is not a price target. The dividend yield is 0.91%, with a payout of 19.3% of free cash flow.

Risks

The main risk is the three-year decline in revenue (-7.8%) and EPS (-36.1%). If it continues, the growth implied by the price becomes harder to reach. The P/FCF premium of 56.5% means the market is paying well above history for each dollar of free cash flow. Free cash flow conversion of 73.9% on a trailing basis is below its five-year average of 80.3%, so a further slide would weaken earnings quality. The Piotroski score of 6 of 9 leaves less margin for deterioration than a full score would. The Beneish M-score is not available, so the manipulation check is missing. This analysis has no debt maturity schedule and no revenue breakdown by segment, so refinancing exposure and the mix of steel products against raw materials cannot be assessed.