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While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of U.S. Steel (NYSE: X ) slipped 1.5% this morning after Deutsche Bank downgraded the steel company from buy, to hold.
So what: Along with the downgrade, analyst David Martin planted a price target of $26 on the stock, representing about 2% worth of upside to yesterday's close. While momentum traders might be attracted to U.S. Steel's 9% earnings-related pop yesterday, Martin believes that all of its efficiency improvements are now baked well into the valuation.
Corporate initiatives announced are + and its shares have now risen ~45% in 6 mths partially in anticipation of the moves. Other + factors are HRC prices, pension benefits & trade cases. We believe these & further cost initiatives are understood or priced-in.
With U.S. Steel still trading at a clear price-to-sales discount to the industry, however, I wouldn't bet on too big of a pullback.
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With the U.S. relying on the rest of the world for such a large percentage of our goods, many investors are ready for the end of the "made in China" era. Well, it may be here. Read all about the biggest industry disrupters since the personal computer in 3 Stocks to Own for the New Industrial Revolution. Just click here to learn more.