UBS announced a change to its rating on Nucor (NYSE:NUE), moving the stock from Buy to Neutral on Wednesday while simultaneously lifting its 12-month price target to $183 from $168 - a 9% increase in the firm�s valuation benchmark.
The rating adjustment follows a notable run in Nucor shares, which have risen roughly 32% since mid-October. In the same interval, competitor Steel Dynamics (NASDAQ:STLD) climbed about 23%. UBS pointed out that the equity rally took place even as Nucor reported a disappointing fourth-quarter operating performance.
Central to UBS�s downgrade is concern over the economics of lower-cost steel imports. The bank says product from Southeast Asia and Brazil became economically viable for U.S. buyers in mid-October. Given a typical three-month logistical and administrative lag for imports, UBS expects that increased volumes could begin to reach U.S. markets in February, adding to domestic supply.
UBS also cited policy-related risks that could weigh on U.S. hot-rolled coil (HRC) prices beyond near-term supply dynamics. Specifically, the firm highlighted ongoing Section 232 tariff carve-out risks and pointed to an upcoming USMCA renegotiation set for July 1 as a source of uncertainty. Those factors, UBS warned, could exert downward pressure on HRC pricing in 2026.
In its price outlook, UBS projects HRC will trade near $876 per short ton, compared with a spot market price it places at about $950. The firm also flagged valuation considerations at the company level: Nucor�s next-twelve-months EV/EBITDA multiple sits at approximately 8.2 times, which UBS notes is about 0.7 times higher than its three-year average and has approached ten-year highs last observed in November 2016.
Separately, Nucor released its fourth-quarter 2025 financial results, which missed analyst expectations. The company reported earnings per share of $1.73 versus an expected $1.86, and generated revenue of $7.69 billion compared with forecasts of $7.87 billion. UBS characterized those outcomes as a negative surprise of 6.99% on EPS and a 2.29% shortfall on revenue.
The earnings announcement coincided with declines in Nucor�s share price in both regular and premarket trading. UBS and market participants will be watching how the company addresses these shortfalls in upcoming quarters, as the combination of softer near-term results, valuation above recent averages, and the prospect of increased import competition informs investor assessments.
Contextual note - The downgrade reflects UBS�s current view of earnings risk, import-driven supply dynamics and potential policy developments that could affect domestic steel pricing into 2026.