Steel Dynamics (STLD) Stock Falls as Canada Tariffs and Weak Guidance Hit Hard

TLDR

• Steel Dynamics (STLD) fell around 3.5% after Canada announced 50% tariffs on U.S. steel and aluminum
• Both STLD and Nucor (NUE) issued Q3 guidance below Wall Street expectations
• Steel Dynamics guided Q3 EPS of $5.34 to $5.38, missing analyst consensus
• JPMorgan raised its price target on STLD to $273 from $260 despite the selloff
• U.S. benchmark steel prices have risen 30% this year to $1,237 a ton

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Steel Dynamics stock dropped around 3.5% on Friday, hit by a double dose of bad news: Canada’s decision to impose 50% tariffs on U.S. steel and aluminum, and quarterly earnings guidance that fell short of what Wall Street was expecting.

Steel Dynamics, Inc., STLD

STLD fell to $240.21 in premarket trading Friday after closing Thursday up 3%. Fellow steelmaker Nucor (NUE) dropped roughly 4.6%, while Cleveland-Cliffs (CLF) slipped 0.2% to $12.74.

Canada’s tariff move raised immediate concerns that Steel Dynamics’ exports into Canada could become less competitive, potentially squeezing margins in a key North American market.

On top of that, Steel Dynamics issued Q3 profit guidance of $5.34 to $5.38 per share. That number came in well below analyst consensus estimates.

Nucor also missed, guiding for adjusted earnings of $5.55 to $5.65 per share, also below expectations.

Both companies have been dealing with higher raw material input costs, which have weighed on near-term profitability.

Analysts See the Guidance as Conservative

Despite the weak numbers, analysts pushed back on the pessimism. The guidance was widely seen on Wall Street as conservative rather than a sign of structural weakness.

JPMorgan actually raised its price target on STLD to $273 from $260, citing the company’s long-term strengths even as near-term headwinds mount.

Steel Dynamics said it expects profits from its steel operations to be meaningfully higher in Q3 compared to Q2, pointing to metal margin expansion, higher average selling prices, and lower scrap costs. Shipments are also expected to increase.

Nucor, for its part, expects sequential profit growth across all segments except raw materials, where pricing has softened.

Steel Prices Still Running Hot

The broader steel market backdrop remains supportive. U.S. benchmark steel prices have climbed nearly 30% this year to $1,237 per ton as of Thursday. Over the past 12 months, prices are up 49%.

That price run has been a major tailwind for both stocks. STLD is up 45% year-to-date through Thursday’s close. NUE has gained 63% over the same period.

Steel Dynamics’ aluminum platform, which is still ramping up, adds a longer-term diversification angle, though the business is currently losing money as it scales.

Analysts have flagged tariff risk and potential price reversals as ongoing concerns for the steel sector going into Q4.

Steel Dynamics stock carries a current market cap of $34.29 billion and has a YTD price performance of over 41%.