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Steel manufacturer Nucor is a safe bet amid the Iran war, and its recent sell-off could offer a buying opportunity for investors, according to UBS. The investment firm upgraded shares to buy from neutral. It also raised its price target on shares to $190 from $184, suggesting 15% upside from Wednesday’s close. “The sell off presents [a] buying opportunity in [a] relatively insulated market,” analyst Andrew Jones said in a note to clients. “We think US steel producers are largely insulated from the Iran conflict.” NUE YTD mountain NUE year to date The war has sparked supply chain bottlenecks affecting chemicals, steel and aluminum, among other manufactured imports and exports. Amid those disruptions, steel stocks, including Nucor, have taken a hit. The VanEck Steel ETF (SLX) plunging nearly 11% since the start of the conflict. Nucor has shed 6% over the past month. However, a combination of tailwinds, including federal contracts for steel manufacturers and a decline in U.S. steel imports, could also propel the company’s shares higher, according to UBS. “We like the setup for NUE given little direct hit from energy [and] project growth (bar mills, towers & coating, Brandenburg, W Virginia) in a federally supported higher price/volume environment,” Jones wrote. Earlier this month, a subsidiary of AMI Metals announced it had clinched a roughly $2.2 billion government contract to “build the wall” along the U.S.-Mexico border — a development that is bullish for other metals producers, including Nucor. Meanwhile, President Donald Trump hiked tariffs on steel to 50% from 25% last June, making it more costly to source the building material from overseas. UBS’ call is in line with consensus on Wall Street. Of the 18 analysts covering Nucor, two-thirds have a buy or strong buy on shares.
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