Steel Dynamics: Buy Rating Maintained as Transitory Q4 Weakness Overlooked in Favor of Medium-Term Demand Upswing and Aluminum Growth Catalyst

Morgan Stanley analyst Carlos De Alba maintained a Buy rating on Steel Dynamics yesterday and set a price target of $173.00.

Carlos De Alba has given his Buy rating due to a combination of factors that balance near-term weakness against a constructive medium-term outlook. While the company’s fourth-quarter 2025 earnings guidance is notably below market expectations, management continues to deploy capital to shareholders via share repurchases, signaling confidence in the underlying business and valuation. In the near term, profits in the steel operations, fabrication, and metals recycling segments are expected to decline, reflecting seasonal demand softness, maintenance-related volume disruptions, and lower pricing, all of which are transitory in nature rather than structural shifts.

Carlos De Alba’s rating is based on the view that Steel Dynamics remains well positioned for an upturn in demand and earnings beyond the current quarter. The fabrication segment’s order book stretches well into the second quarter of 2026 at supportive price levels, indicating revenue visibility and continued customer demand. Management also anticipates better shipment volumes next year across key product lines, supported by lower interest rates, infrastructure spending, and onshoring trends. In addition, the ongoing ramp-up of the aluminum mill—with initial qualifications in industrial, beverage can, and automotive applications—adds a strategic growth driver that can enhance the company’s long-term earnings power and diversification, underpinning the Buy recommendation despite short-term guidance disappointments.

In another report released yesterday, Bank of America Securities also maintained a Buy rating on the stock with a $185.00 price target.

Based on the recent corporate insider activity of 117 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of STLD in relation to earlier this year.