On Wednesday, Nucor Corporation (NYSE:NUE) announced it would build a state-of-the-art sheet mill in Mason Country, West Virginia. The high-quality steel manufacturer will employ approximately 800 full-time teammates once fully operational.

Nucor predicts the new sheet mill to cost around $2.7 billion and to have the capacity to produce three million tons of steel annually. Following the news, shares of the company surged over 3.5%, closing at $115.14 in Wednesday’s extended trading session.

Pending permit and regulatory approvals, the mill in Mason Country will take two years to build and will be able to produce 84-inch sheet products and include a 76-inch tandem cold mill and two galvanizing lines, among other features.

Our new sheet mill in Mason County will have unmatched capabilities that will enable the continued expansion of high-quality, low carbon steels, building on our industry-leading offerings. We are pleased to create hundreds of new, high-paying jobs and position West Virginia as a leader in clean steel production. We are also excited to create substantial long-term value for investors through this high-return investment, which will help drive Nucor’s continued growth.” – CEO Leon Topalian, Nucor.


NUCOR OUTLOOK

As a strategic partner, Nucor remains at the forefront of the industry to proactively bring customers new opportunities for their businesses and individual projects to drive progress and growth together. The company and its manufacturing affiliates of steel and steel products operate facilities in the United States, Canada, and Mexico.

However, according to Wolfe Research analyst Timna Tanners, the macro prospects of steel face considerable headwinds in the future, which may hurt the company.  

Tanners recently downgraded the stock from Hold to Sell, while Wall Street’s Top Analysts awarded Nucor a Hold consensus rating. The average Nucor price target of $107.40 implies a downside potential of 6.38% from current levels.

Sequentially, shares of Nucor have gained 102.3% over the past year, while steel sector-related ETFs (exchange-traded funds) further strengthened on Wednesday amid investor and analyst optimism within the industry and a positive outlook for Nucor.

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