Steel Dynamics (STLD) stock is pushing higher on Monday after President Donald Trump threatened 50% tariffs on Canadian vehicles and steel from Jan. 1, 2027.
As investors cheered the announcement, STLD was briefly seen trading above its 100-day moving average (MA), indicating bulls are attempting to regain control of the near-to-medium term.
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Heading into Aug. 24, Steel Dynamics shares were already up about 30% versus the start of this year.
www.barchart.comWhat Higher Tariffs on Canadian Steel Mean for STLD Stock
The recent collapse of U.S.-Canada trade talks is bullish for STLD stock as higher barriers on steel imports tend to reduce competition for U.S. producers.
If the Trump administration does indeed proceed with slapping higher tariffs on Canadian steel, it would support domestic steel prices, helping Steel Dynamics’ margins expand over time.
Note that Canada is the largest foreign supplier of steel to the U.S., meaning 50% tariffs are going to choke off a major source of low-cost supply.
All in all, higher tariffs would enable Steel Dynamics to expand market share and drive higher average selling prices (ASPs) directly to its bottom line.
Should You Buy Steel Dynamics Shares Into Strength Today?
Steel Dynamics stock is attractive for long-term investors also because the company’s underlying fundamentals warrant continued upside ahead.
The Nasdaq-listed firm recently posted record steel shipments of 3.7 million tons for its fiscal Q2. Plus, STLD repurchased about $200 million worth of its shares in the second quarter, reinforcing management’s confidence in future upside.
It's also worth mentioning that Steel Dynamics currently pays a dividend yield of 0.92% as well, which makes it even more attractive for income-focused investors.
That said, the company is currently trading at a price-to-sales (P/S) multiple of about 173x, which makes it more expensive to own than rivals, including Nucor (NUE) and Cleveland-Cliffs (CLF).
Wall Street Remains Bullish on Steel Dynamics
Wall Street analysts, however, recommend looking beyond valuation concerns and owning STLD shares at the current price.
According to Barchart, the consensus rating on Steel Dynamics sits at “Moderate Buy,” with the mean price target of nearly $277 indicating potential upside of roughly 20% from here.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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