United States Steel Corporation Eyes Its Next Breakout

Now might be the time to strengthen your position in X stock

By Charles Payne


United States Steel Corporation (NYSE:X) has been around for 115 years and is the largest steel producer in the country. I’ve been keeping an eye on it for some time now, and there’s no question the company has a lot of great factors working for it right now.

Just take a look at the latest earnings report, for example. X stock posted strong financial results after the close on Tuesday, with adjusted earnings of 92 cents a share nearly triple what the company brought in last year and beating the Street at 70 cents. Sales were up 21% to $3.25 billion, also better than estimates of $3.07 billion, driven by flat rolled steel that is used in autos, construction and machinery.

The flat rolled steel segment saw a 40.4% increase in profit to $160 million. Shipments were up slightly, and it enjoyed pricing power, with the average realized price per ton coming in at $728 versus $718 a year ago.

While the tubular segment reported a loss of $7 million in the quarter, it was a lesser loss than expected. Plus, the average price per ton saw a huge 36.6% increase, from $1,049 to $1,433, and shipments were up nearly 80%.

To top it all off, management provided upbeat guidance for the year. Forecasts are for earnings of $1.70 a share, which came in above the consensus at $1.63.

Eyeing Key Resistance in X Stock

The shares rallied the following day, briefly popping to a six-month high above $29 before dipping back a bit to close the day up nearly 8%. That $29 level is a key resistance area, and we need to see the shares close above it before they can begin their next breakout.

The good news is that I do expect that to happen, especially considering the stock has been in an uptrend since May — and when it does, the chart opens up for a run to $35 and beyond over the long term.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/11/united-states-steel-corporation-x-stock-next-breakout/.

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