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NUCOR STEEL

Nick Hartnett & Matt Ketellapper FNCE 4820 Professor Madigan

4/7/2011

“The safest, highest quality, lowest cost, most productive, and most profitable steel and steel products company in the world.”
- Nucor Mission Statement

Executive Summary
Nucor Corporation (“NUE” or “the Company”) is the second largest steel manufacturer and fabricator in the US. Key Drivers of Value 1. 2. 3. 4. Increasing steel spot price Successful economic recovery Government protection Cost control mechanism

Key Risks 1. 2. 3. 4. Steel & scrap prices Cyclicality Exposure Foreign competition & government policy Other raw materials prices

DCF Valuation Discounted cash flow valuation produced a stock price of $66.22 per share, indicating that Nucor is undervalued. A bull market scenario could reach a stock price of $120.62 and a bear market scenario could reach $28.85 per share. Multiples Analysis Multiples analysis based on P/CF, P/E, P/BV, P/S, EV/EBITDA produced an average stock price of $52.74, indicating that NUE is currently undervalued. The strongest multiples were P/CF and EV/EBITDA.
Base Volume G-rate Composite price G-rate Total Capacity G-rate 10 year Average Growth

Stock Price
Bear Volume G-rate Composite price G-rate Total Capacity G-rate

$

4% 2% 4% 66.22

Volume G-rate Composite price G-rate Total Capacity G-rate Stock Price
Bull

$

8% 11% 9% 258.04

Stock Price

$

-4% -4% 0% 28.85

Volume G-rate Composite price G-rate Total Capacity G-rate Stock Price

$

8% 4% 10% 120.62

Page | 1

Nucor Corporation
NUE is the second largest steel manufacturer in the US. NUE and its affiliates, the David J. Joseph Company and Harris Steel, are recognized as global leaders in process innovation and efficiency. Unlike its integrated steel counterparts that use iron ore pellets and blast furnaces that result in unsustainable

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