What happened
After inching 2.5% higher last week, shares of Nucor (NUE 0.14%) are downright soaring so far this week. Since the market's close last Friday, Nucor's stock is up 9.7% as of the market close on Thursday.
The primary driver for the stock's climb this week is the company's second-quarter 2021 earnings report, while management's auspicious outlook for the third quarter and the congressional support of the infrastructure bill are also contributing to the stock's rise.
Image source: Getty Images.
So what
Beating analysts top-line estimate of $8.31 billion, Nucor reported revenue of $8.79 billion for Q2 2021 last week. It was the bottom of the income statement, however, that probably played a greater role in spurring investors to continue picking up shares over the past few days. In mid-June, Nucor provided Q2 2021 earnings-per-share (EPS) guidance of $4.60 to $4.70 -- slightly higher than the analysts' estimate of $4.52. Surpassing all expectations, Nucor reported a company record for its bottom line: EPS of $5.04.
Presumably, the company's record won't last too long. In its press release announcing the Q2 2021 results, management forecast a new company record would be set in Q3. Nucor President and CEO Leon Topalian said, "We expect to set a new record for quarterly earnings in the third quarter of 2021 as demand remains robust and virtually all the steel end use markets that we monitor are growing."
The company's Q2 2021 earnings and the guidance for Q3 aren't the only factors pushing the stock higher. With momentum building for the $550 billion infrastructure bill, it's likely that investors are choosing to pick up shares of the self-proclaimed "most diversified steel and steel products company" in North America.
Now what
With Nucor turning in a record performance in Q2 and suggesting it'll do the same in Q3, it's hardly a shock that the stock is flying higher this week. Despite the gain, though, shares still seem reasonably priced, trading at 9.3 times operating cash flow, a discount to the five-year average multiple of 9.9. Consequently, investors interested in picking up exposure to this leading infrastructure company can still do so at an attractive price.
