NUE's target price is $150/sh based on ~7x estimated normalized EBITDA in Steel Mills and ~8x estimated normalized EBITDA in Steel Products. These multiples are consistent with recent averages.

Cyclicality: The North American steel industry is a cyclical industry that depends upon the health of the North American economy. A major downturn in the North American economy could reduce demand for Nucor's products.

Competition: Historically, intense competition in the North American steel industry limited product pricing gains and caused industry bankruptcies and consolidations. If North American producers are unable to continue the more recent trend of matching supply to demand, the company's long-term profitability could be impacted.

Imports: A significant increase in steel imports to North America would substantially reduce demand for the North American steelmakers' products.

Raw Material Costs: NUE is heavily dependent on scrap as an input to its steel-making processes. Difficulty passing through historically volatile iron ore and scrap costs onto customers could impact NUE's results. However, a significant decline in scrap costs could boost the company's profitability.

If the impact from these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our target price. However, should they be less than anticipated, the stock could trade above our target price.