Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400

Steel Dynamics, Inc.

Recommendation Price 12-Mo. Target Price Report Currency Investment Style
BUY « « « « « USD 86.52 (as of market close Sep 09, 2022) USD 96.00 USD Mid-Cap Blend
Equity Analyst Matthew Miller, CFA

GICS Sector Materials Summary STLD is a mini-mill producer of flat-rolled steel, structural steel, special bar-quality steel, and
Sub-Industry Steel rails. STLD is one of the largest U.S. metal recyclers.

Key Stock Statistics (Source: CFRA, S&P Global Market Intelligence (SPGMI), Company Reports)
52-Wk Range USD 100.37 - 50.54 Oper.EPS2022E USD 20.57 Market Capitalization[B] USD 15.8 Beta 1.42
Trailing 12-Month EPS USD 23.49 Oper.EPS2023E USD 10.65 Yield [%] 1.57 3-yr Proj. EPS CAGR[%] -10
Trailing 12-Month P/E 3.68 P/E on Oper.EPS2022E 4.21 Dividend Rate/Share USD 1.36 SPGMI's Quality Ranking B
USD 10K Invested 5 Yrs Ago 28,569.0 Common Shares Outstg.[M] 183.00 Trailing 12-Month Dividend USD 1.28 Institutional Ownership [%] 83.0

Price Performance Analyst's Risk Assessment

LOW MEDIUM HIGH

Our risk assessment reflects the company's exposure to
the highly cyclical auto and nonresidential construction
markets, partly offset by STLD's strong balance sheet, low-
cost structure, and product diversity.

Revenue/Earnings Data

Revenue (Million USD)

1Q 2Q 3Q 4Q Year
2023 E 4,795 E 4,865 E 4,671 E 4,431 E 18,762
2022 5,570 6,213 E 5,653 E 4,932 E 22,368
2021 3,545 4,465 5,088 5,311 18,409
2020 2,575 2,094 2,331 2,601 9,601
2019 2,817 2,771 2,527 2,350 10,465
2018 2,604 3,091 3,224 2,904 11,822

Earnings Per Share (USD)

1Q 2Q 3Q 4Q Year
Source: CFRA, S&P Global Market Intelligence
2023 E 3.32 E 2.81 E 2.41 E 2.11 E 10.65
Past performance is not an indication of future performance and should not be relied upon as such.
2022 6.02 6.73 E 4.85 E 2.97 E 20.57
Analysis prepared by Matthew Miller, CFA on Jul 22, 2022 01:39 AM ET, when the stock traded at USD 70.73.
2021 2.10 3.40 4.96 5.78 16.09
2020 0.88 0.47 0.51 0.97 2.83
Highlights Investment Rationale/Risk
2019 0.91 0.87 0.69 0.62 3.09
u After revenue increased sharply (92%) in 2021 u Our Buy recommendation is based on STLD’s 2018 0.96 1.53 1.69 1.31 5.49
on a strong pricing tailwind, we forecast 22% strong market position and top-tier financial Fiscal Year ended Dec 31. EPS Estimates based on CFRA's
sales growth in 2022, driven by higher shipment strength, partly offset by the risk of Operating Earnings; historical earnings are adjusted. In periods
volumes from the Sinton mill ramp up and overcapacity in North America and current where a different currency has been reported, this has been
resilient strength in domestic steel prices. Steel excess capacity globally. We think STLD is adjusted to match the current quoted currency.
demand in North America should remain strong poised to benefit from its strong market
in 2022 and 2023, with strength in automotive, position in construction and infrastructure, Dividend Data
construction, and energy markets. STLD often while also having exposure to automobile and Amount Date Ex-Div. Stk. of Payment
posts best-in-class production utilization rates, heavy equipment manufacturing. STLD’s low- ( USD) Decl. Date Record Date
which was around 95% in Q2 2022 vs. 82% cost operations, organic growth investments,
industry average; during 2021, it was 91% vs. and highly variable costs should benefit the 0.3400 Aug 22 Sep 29 Sep 30 Oct 14 '22
the industry average of 81%. company. Its diverse product mix and increased 0.3400 May 06 Jun 29 Jun 30 Jul 15 '22
internal sourcing of scrap will likely reduce the 0.3400 Feb 28 Mar 30 Mar 31 Apr 15 '22
u Beginning in Q1 2022, the new Sinton, Texas
volatility of its results over the course of the 0.2600 Nov 19 Dec 30 Dec 31 Jan 14 '22
flat-rolled steel mill commenced operations and
should drive new growth opportunities. We like business cycle. Dividends have been paid since 2004 . Source: Company reports
STLD’s strategic investment in its new flat- u Risks to our recommendation and target price Past performance is not an indication of future performance
and should not be relied as such.
rolled mill, targeting the Southwestern U.S. and include lower steel product prices, decreases in
Forecasts are not a reliable indicator of future performance.
Northern Mexico markets that have historically product demand (especially construction and
Dividends paid in currencies other than the Trading currency have
relied heavily on distant mills and imports. We automotive end markets), increases in energy
been accordingly converted for display purposes.
expect the new Sinton mill to increase STLD’s and raw materials costs, and a decline in major
annual steel production capacity by 28%. construction and infrastructure projects.
u STLD has a top-tier balance sheet, best-in- u Our 12-month target price of $96 implies an EV/
class capacity usage, and strong liquidity, in our EBITDA of 3.5x our 2022 EBITDA estimate, in
view. Since 2017 through the second quarter of line with peers but below STLD’s three-year avg.
2022, STLD has increased its dividend by 143% forward EV/EBITDA of 5.5x. Overcapacity
and repurchased $3.2 billion in shares, remains an overhang on the industry, but we
representing 30% of shares outstanding. think STLD is poised to continue winning share
and generating top-tier returns.

Redistribution or reproduction is prohibited without written permission. Copyright © 2022 CFRA. This document is not intended to provide personal investment advice and it does not take into account the specific investment
objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek independent financial advice regarding the suitability and/or appropriateness of making an investment
or implementing the investment strategies discussed in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such investments, if any,
may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested. Investors should seek advice concerning any impact this investment may have on
their personal tax position from their own tax advisor. Please note the publication date of this document. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless
otherwise indicated, there is no intention to update this document.
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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Business Summary Apr 22, 2022 Corporate information

CORPORATE OVERVIEW. Founded in 1993, Steel Dynamics, Inc. (STLD) is one of the largest steel producers Investor contact
and one of the largest metals recyclers in the U.S., based on annual steelmaking and coating capacity of M. Owen (260 969 3500)
approximately 13 million tons and actual metals recycling volume during 2021. The primary sources of
revenue are from the manufacture and sale of steel products, processing and sale of recycled ferrous and Office
nonferrous metals, and the fabrication and sale of steel joist and deck products. Steel Dynamics operates in 7575 West Jefferson Boulevard, Fort Wayne, Indiana,
the electric arc furnace (EAF) mini-mill sector of the steel industry. 46804
STLD has three reporting segments (steel operations, metals recycling operations, and steel fabrication
Telephone
operations) and an other segment. Steel operations consist primarily of steelmaking and coating
260 969 3500
operations. In 2021, STLD has approximately 8.4 million tons of flat roll steel shipping capacity, comprised
of 6.4 million tons of flat roll steel production capacity at its Butler and Columbus Flat Roll divisions and an Fax
additional 2.0 million tons of flat roll processing capacity at its Techs and Heartland divisions. STLD also has N/A
annual flat roll galvanizing capability of 3.9 million tons and painting capability of 1.2 million tons. In
addition, STLD has 4.4 million tons of long product steel capacity. Steel operations sell directly to end users, Website
steel fabricators, and service centers. These products are used in numerous industry sectors, including the stld.steeldynamics.com
automotive, construction, manufacturing, transportation, heavy and agriculture equipment, as well as the
pipe and tube markets. The most significant portion of STLD’s products is tied to automotive, construction, Officers
and other manufacturing sectors. Steel operations accounted for 72% of consolidated net sales in 2021. In Chairman, Co-Founder, Chairman, Co-Founder,
2021, STLD’s own steel consuming businesses purchased nearly 1.7 million tons of steel from its steel mills, CEO & President CEO & President
representing 15% of STLD’s total 2021 steel shipments. Export sales represented 4% of steel operations M. D. Millett M. D. Millett
segment net sales in 2021.
The metals recycling operations include both ferrous and nonferrous scrap metal processing, Chairman, Co-Founder, Executive VP, CFO &
transportation, marketing, and brokerage and scrap management services, strategically located close to CEO & President Company Secretary
STLD steel mills and other end-user scrap consumers, throughout the U.S. and Central and Northern Mexico. M. D. Millett T. E. Wagler
Metals recycling operations accounted for 12% of consolidated net sales in 2021. STLD’s steel mills utilize a
portion of the ferrous scrap processed internally as raw material in steelmaking operations (66% in 2021), Board Members
and the remainder (34%) is sold to other consumers, such as other steel manufacturers and foundries. B. S. Seaman L. M. Sierra
Export sales represented 11% of metals recycling segment net sales in 2021.
F. D. Byrne M. D. Millett
Steel fabrication operations include seven New Millennium Building Systems plants that primarily serve the
non-residential construction industry throughout the U.S. STLD has established a national operating G. L. Shaheen R. P. Teets
footprint that allows the company to serve the entire U.S. construction market, as well as national accounts, J. C. Marcuccilli S. A. Sonnenberg
such as large retail chains. Steel fabrication operations accounted for 10% of consolidated net sales during K. E. Busse S. L. Bargabos
2021. Steel operations supply a substantial portion of the steel utilized in steel fabrication operations,
K. W. Cornew T. M. Dolan
providing strategic pull-through demand. Steel fabrication operations produce steel building components,
including steel joists, girders, trusses, and steel deck. STLD’s steel fabrication operations maintain
approximately one-third of the total domestic steel joist and deck market for bookings, which grew Domicile Auditor
significantly in 2021 to nearly 3.6 million tons from 2.4 million tons during 2020. Indiana Ernst & Young LLP
IMPACT OF RECENT DEVELOPMENTS. In 2019, STLD began constructing a new flat roll steel mill in Sinton,
Founded
Texas (near Corpus Christi), with annual production capability of 3.0 million tons, including value-added
1993
coating lines comprised of a galvanizing line with annual capacity of 550,000 tons with galvalume capability
and a paint line with annual coating capacity of 250,000 tons. STLD is targeting regional markets that Employees
represent over 27 million tons of relevant flat roll steel consumption, which includes the growing 16 million 10,640
ton Mexican flat roll market. Some coating operations commenced operation in late 2021 and the rest of
operations commenced in early 2022. Capital expenditures for Sinton were $831 million, $928 million, and Stockholders
$205 million in 2021, 2020, and 2019, respectively. 1,365
In August 2020, STLD completed the acquisition of Zimmer, S.A. de C.V., a Mexican metal recycling company,
which is an important part of STLD’s raw material procurement strategy for its new steel mill in Sinton,
Texas.
FINANCIAL TRENDS. In 2021, STLD achieved record operational and financial results including: record steel
and steel fabrication shipments of 11.2 million and 789,000 tons, respectively; record net sales of $18.4
billion; and record cash flow from operations of $2.2 billion. Domestic steel demand remained strong
throughout 2021, supported by strength in construction, automotive, and industrial sectors. Customer
inventory levels throughout the steel supply chain remained historically low, as supply was not sufficient to
meet the robust demand. These strong market fundamentals led to a surge in steel prices, which resulted in
a significant metal spread expansion.
Steel operations segment shipments increased 4% year-over-year in 2021, with average selling prices up
81%, or $621 per ton. The metallic raw material cost consumed in STLD’s steel mills increased $179 per ton,
or 67% year-over-year. Metal spread (steel mill selling prices less cost of ferrous scrap consumed)
increased 86% year-over-year in 2021, which (when combined with the 4% volume increase) drove
operating income for steel operations to increase nearly four times, to $4.4 billion, when compared to 2020.
During 2021, STLD repurchased $1.1 billion in shares, representing 8% of shares outstanding.
Steel fabrication net sales increased 95% year-over-year in 2021, as shipments rose 19% and average
selling prices increased 64%, or $874 per ton. The strength in the non-residential construction markets
resulted in record shipments and STLD ended 2021 with a record backlog.

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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Quantitative Evaluations Expanded Ratio Analysis

Fair Value Rank 1 2 3 4 5 2021 2020 2019 2018

Lowest Highest Price/Sales 0.70 0.82 0.72 0.60
Based on CFRA's proprietary quantitative model, Price/EBITDA 2.76 6.57 5.75 3.46
stocks are ranked from most overvalued (1) to most Price/Pretax Income 3.05 11.10 8.58 4.36
undervalued (5). P/E Ratio 3.86 13.03 11.02 5.47
Avg. Diluted Shares Outstg. (M) 206.62 212.34 220.75 235.19
Fair Value USD Analysis of the stock’s current worth, based on CFRA’s
Calculation 170.35 proprietary quantitative model suggests that STLD is Figures based on fiscal year-end price
undervalued by USD 83.83 or 96.89%

Volatility LOW AVERAGE HIGH

Key Growth Rates and Averages
Technical NEUTRAL Since June, 2022, the technical indicators for STLD
Past Growth Rate (%) 1 Year 3 Years 5 Years
Evaluation have been NEUTRAL"
Net Income 483.50 36.69 53.10
Insider Activity UNFAVORABLE NEUTRAL FAVORABLE Sales 91.73 15.91 18.81

Ratio Analysis (Annual Avg.)

Net Margin (%) 17.46 9.87 9.75
% LT Debt to Capitalization 31.58 36.68 37.79
Return on Equity (%) 60.87 30.50 30.48

Company Financials Fiscal year ending Dec 31

Per Share Data (USD) 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Tangible Book Value 28.49 16.89 15.36 14.36 11.41 9.23 8.24 7.44 6.41 5.70
Free Cash Flow 5.84 -1.00 4.30 5.03 2.39 2.69 3.88 2.22 0.57 1.01
Earnings 15.56 2.59 3.04 5.35 3.36 1.56 -0.54 0.67 0.83 0.73
Earnings (Normalized) 16.09 2.83 3.09 5.49 2.65 1.92 0.74 1.35 0.83 0.77
Dividends 1.04 1.00 0.96 0.75 0.62 0.56 0.55 0.46 0.44 0.40
Payout Ratio (%) 6.63 37.99 29.84 13.42 17.91 35.53 NM 67.11 50.08 53.58
Prices: High 74.37 40.22 39.35 52.10 43.89 40.17 23.16 25.51 19.74 16.66
Prices: Low 33.77 14.98 25.02 28.91 32.15 15.32 16.23 15.80 13.07 10.11
P/E Ratio: High 4.60 14.20 12.70 9.50 16.60 20.90 31.30 18.90 23.80 21.70
P/E Ratio: Low 2.10 5.30 8.10 5.30 12.10 8.00 21.90 11.70 15.70 13.10

Income Statement Analysis (Million USD)

Revenue 18,409 9,601 10,465 11,822 9,539 7,777 7,594 8,756 7,373 7,290
Operating Income 4,301 867.00 987.00 1,722 1,067 861.00 356.00 580.00 387.00 399.00
Depreciation + Amortization 348.00 326.00 321.00 317.00 299.00 296.00 295.00 263.00 231.00 225.00
Interest Expense 57.00 128.00 131.00 127.00 134.00 146.00 154.00 137.00 128.00 159.00
Pretax Income 4,209 705.00 875.00 1,620 935.00 564.00 -242.00 165.00 263.00 204.00
Effective Tax Rate 22.90 19.10 22.60 22.50 13.80 36.20 40.00 44.40 37.80 30.30
Net Income 3,214 551.00 671.00 1,258 813.00 382.00 NM 157.00 189.00 164.00
Net Income (Normalized) 2,598 433.00 540.30 1,015 591.50 468.00 141.80 346.60 190.30 179.20

Balance Sheet and Other Financial Data (Million USD)

Cash 1,244 1,369 1,644 1,057 1,029 841.00 727.00 361.00 395.00 407.00
Current Assets 6,901 4,258 4,253 4,033 3,508 2,930 2,538 2,938 2,474 2,296
Total Assets 12,531 9,266 8,276 7,704 6,856 6,424 6,202 7,233 5,933 5,815
Current Liabilities 2,227 1,259 1,007 1,019 869.00 713.00 535.00 851.00 975.00 610.00
Long Term Debt 3,009 3,016 2,645 2,352 2,353 2,353 2,578 2,935 1,766 2,173
Total Capital 9,526 7,541 6,875 6,264 5,688 5,246 5,266 5,904 4,720 4,679
Capital Expenditures 1,006 1,198 452.00 239.00 165.00 198.00 115.00 112.00 187.00 224.00
Cash from Operations 2,204 987.00 1,396 1,415 739.00 853.00 1,054 628.00 312.00 446.00
Current Ratio 3.10 3.38 4.22 3.96 4.04 4.11 4.74 3.45 2.54 3.77
% Long Term Debt of Capitalization 31.60 40.00 38.50 37.60 41.40 44.90 49.00 49.70 37.40 46.40
% Net Income of Revenue 17.50 5.70 6.40 10.60 8.50 4.90 -1.70 1.80 2.60 2.20
% Return on Assets 24.67 6.18 7.72 14.79 10.04 8.52 3.31 5.51 4.12 4.23
% Return on Equity 60.90 13.60 17.00 34.90 26.00 12.90 -5.20 3.30 6.40 5.90

Source: S&P Global Market Intelligence. Data may be preliminary or restated; before results of discontinued operations/special items. Per share data adjusted for stock dividends; EPS diluted.
E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.

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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Sub-Industry Outlook Industry Performance

We have a neutral fundamental outlook for the previous waves and does not account for the GICS Sector: Materials
steel sub-industry, with a forecast for strong war in Ukraine. Sub-Industry: Steel
demand growth combined with supply constraints, President Biden signed a $1.2 trillion Based on S&P 1500 Indexes
partly offset by the market overhang of global infrastructure bill into law on November 15, Five-Year market price performance through Sep 10, 2022
overcapacity, especially in China. 2021. The infrastructure package includes
According to the American Iron and Steel Institute, $550 billion of new federal investments (over
U.S. capacity utilization was 81.6% in 2021 versus five years) in transportation, broadband, and
68.1% in 2020. According to the World Steel utilities, including $110 billion on roads,
Association (Worldsteel), global crude steel bridges, and major projects; $66 billion in
production increased 3.7% Y/Y in 2021 to 1,950 freight and passenger rail; and $59 billion in
million metric tons (Mt), despite a 3.0% Y/Y drop public transit systems.
in Chinese production to 1,033 Mt. Strong growth Although historically high prices are driving
was experienced in the next three biggest steel- record profitability for steel producers, the
producing countries: India up 17.8% Y/Y to 118 Mt, higher prices could prove to be unsustainable,
Japan up 15.8% Y/Y to 96 Mt, and the U.S. up given substantial excess capacity and several
18.3% Y/Y to 86 Mt. Russia and Ukraine are the new domestic mills scheduled to begin
5th and 14th largest steel-producing countries, production in the next few years. Global
with 2021 production of 76 Mt (3.9% of global overcapacity (around 625 million metric tons)
total) and 21 Mt (1.1%), respectively. is an overhang on the fundamentals of steel
After the domestic steel price (domestic hot rolled producers, an issue that has been improved
coil) peaked in August 2021 at around $1,905/ton, since March 2018, when Section 232 tariffs
prices started correcting downward and were and quotas were put in place. Recent
trading around $1,000/ton throughout much of agreements with some countries on relaxing/
February 2022, before a strong rebound in the removing Section 232 trade policies could pose
steel price benchmark in March 2022. During the risks to the strength of the domestic steel
first quarter of 2022, the steel price averaged industry.
close to $1,300/ton and was trading around As of March 25, 2022, the YTD return for the
$1,500/ton during the last half of March. For S&P 1500 Steel Index was 39.4% versus the
reference, the average price during 2021 was S&P Composite 1500 Index down 4.7%. In
$1,576/ton. 2021, the S&P 1500 Steel Index increased
Late in 2021, iron ore prices suffered from China’s 66.0% versus the S&P Composite 1500 Index
crackdown on limiting steel production to reduce up 26.7%. As of March 25, 2022, the five-year NOTE: A sector chart appears when the sub-industry does not have
pollution. The iron ore price (with 62% iron compound annual growth rate (CAGR) for the sufficient historical index data.
content) plunged below $100/metric ton in S&P 1500 Steel Index was 17.4% versus the All Sector & Sub-Industry information is based on the Global Industry
November 2021, after hitting a record of $235/ S&P Composite 1500 Index CAGR of 13.6%. Classification Standard (GICS).
metric ton in May 2021. During the first quarter of / Matthew Miller, CFA Past performance is not an indication of future performance and should
2022, iron ore averaged $142/metric ton versus not be relied upon as such.
the full-year 2021 average of $157/metric ton. Source: CFRA, S&P Global Market Intelligence
As of October 14, 2021, Worldsteel forecasted that
global steel demand will have expanded 4.5% in
2021, reaching 1,855 million metric tons (after
growth of only 0.1% in 2020) and Worldsteel
forecasted an additional 2.2% growth in 2022.
Worldsteel’s forecast assumed that the spread of
Covid-19 variants will be less disruptive than

Sub-Industry: Steel Peer Group*: Steel

Recent 30-Day 1-Year Fair Return
Stock Stock Stk. Mkt. Price Price P/E Value Yield on Equity LTD to
Peer Group Symbol Exchange Currency Price Cap. (M) Chg. (%) Chg. (%) Ratio Calc. (%) (%) Cap (%)

Steel Dynamics, Inc. STLD NasdaqGS USD 82.99 15,155.0 2.3 26.0 4.0 170.35 1.6 70.2 28.4
ATI Inc. ATI NYSE USD 29.94 3,889.0 0.7 71.7 24.0 23.08 N/A 4.2 61.9
Alpha Metallurgical Resources, Inc. AMR NYSE USD 138.14 2,393.0 5.1 189.2 2.0 N/A 1.1 177.4 0.2
Cleveland-Cliffs Inc. CLF NYSE USD 17.63 9,120.0 -7.4 -23.9 3.0 26.48 N/A 63.7 40.0
Commercial Metals Company CMC NYSE USD 40.36 4,863.0 -3.7 29.0 6.0 54.18 1.4 40.8 22.4
POSCO Holdings Inc. PKX NYSE USD 43.69 12,740.0 -6.6 -42.7 3.0 N/A 5.6 14.5 14.5
Reliance Steel & Aluminum Co. RS NYSE USD 190.35 11,477.0 0.2 28.6 6.0 272.69 1.8 30.7 13.0
Stelco Holdings Inc. STZH.F OTCPK USD 28.36 2,365.0 -1.8 -25.4 1.0 N/A 3.3 141.5 2.3
Ternium S.A. TX NYSE USD 30.42 5,972.0 -10.0 -43.2 2.0 N/A 5.9 36.5 3.6
United States Steel Corporation X NYSE USD 24.29 5,762.0 -0.8 -4.5 2.0 62.70 0.8 60.7 25.4
Worthington Industries, Inc. WOR NYSE USD 49.94 2,473.0 -4.8 -7.4 7.0 N/A 2.5 25.2 28.3

*For Peer Groups with more than 10 companies or stocks, selection of issues is based on market capitalization.
NA-Not Available; NM-Not Meaningful.
Note: Peers are selected based on Global Industry Classification Standards and market capitalization. The peer group list includes companies with similar characteristics, but may not include all the companies within the same
industry and/or that engage in the same line of business.

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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Analyst Research Notes and other Company News

July 22, 2022 October 20, 2021

01:06 AM ET... CFRA Maintains Buy Opinion on Shares of Steel Dynamics Inc. (STLD 11:32 AM ET... CFRA Maintains Buy Recommendation on Shares of Steel Dynamics
70.73****): Inc. (STLD 65.67****):
We lower our 12-month target by $10 to $96, on an EV/EBITDA of 3.5x our ‘22 We increase our 12-month target price by $12 to $78, which values STLD at an EV/
EBITDA estimate, in line with peers but below STLD’s three-year avg. forward EV/ EBITDA of 4.0x our ‘22 EBITDA estimate, below STLD’s three-year average forward
EBITDA of 5.5x. We raise our ‘22 EPS estimate by $3.09 to $20.57 but lower ‘23’s by EV/EBITDA of 6.0x, given our view of peak steel prices in ‘21 and ‘22. We raise our ‘21
$0.15 to $10.65. STLD posts Q2 adj. EPS of $6.73 vs. $3.40, $0.57 above consensus, EPS estimate by $2.21 to $16.29 and ‘22’s by $5.33 to $12.35. STLD posts Q3
on a sales beat of 3.7%. Adj. EBITDA rose 64% Y/Y to $1.7 billion, as strength in steel adjusted EPS of $4.96 vs. $0.51, $0.11 above consensus; sales missed by 0.3%. On a
fabrication more than offset lower selling prices for flat rolled steel. STLD also sequential basis, the average steel price per ton increased $258 to $1,550, while the
achieved record quarterly steel shipments of 3.1 million tons, which helped offset average ferrous scrap cost per ton was up only $50, resulting in a metal spread that
lower prices. Separately, STLD announced it will enter the aluminum market with a is up $208 per ton. STLD continues to post best-in-class capacity utilization rates,
$2.2 billion investment to build a 650,000 metric ton low-carbon, recycled aluminum at 93% in Q3 versus the industry average of 85%. Although we think high steel
flat rolled mill. The mill is expected to start up in Q1 ‘25 and add nearly $700 million prices are unsustainable, we expect the market tailwinds to continue to support
in annual EBITDA. As the Sinton mill is ramping up, we think the aluminum mill is an prices in upcoming quarters. STLD’s steel mill in Sinton, TX is poised to start up
attractive capital-efficient project providing visibility to the next leg of strong growth before the end of ‘21; the mill will increase STLD’s capacity by 25% and will be a
in earnings. / Matthew Miller, CFA major growth driver starting in ‘22. / Matthew Miller, CFA

April 22, 2022 July 20, 2021

12:14 AM ET... CFRA Maintains Buy Opinion on Shares of Steel Dynamics Inc. (STLD 10:36 AM ET... CFRA Maintains Buy Recommendation on Shares of Steel Dynamics
93.24****): Inc. (STLD 55.08****):
We increase our 12-month target price by $1 to $106, with an EV/EBITDA of 4.2x our We increase our 12-month target price by $8 to $66, using an EV/EBITDA multiple of
‘22 EBITDA estimate, below STLD’s three-year avg. forward EV/EBITDA of 5.7x and 5.0x our ‘22 EBITDA estimate, a discount to STLD’s three-year average forward EV/
peers’ avg. of 5.1x. We raise our ‘22 EPS estimate by $0.43 to $17.48 and keep ‘23’s EBITDA of 6.2x, given our view that ‘21 and ‘22 steel prices will mark peak steel
at $10.80. STLD posts Q1 adj. EPS of $6.02 vs. $2.10, $0.30 above consensus, on a prices. We raise our ‘21 EPS estimate by $6.18 to $14.08 and ‘22’s by $2.92 to
top-line beat of 3.4%. Q1 adj. EBITDA increased 129% Y/Y to a record $1.6 billion $7.02. STLD posts Q2 adjusted EPS of $3.40 vs. $0.47, $0.02 above consensus,
and beat consensus by 1.2%. Steel Operations generated strong operating income driven by a top-line beat of 5.9%. STLD posted a record quarterly operating income
of $1.2 billion, driven by record shipments of 2.9 million tons, of which the new of $956 million (up 502% Y/Y) and record cash flow from operations of $587 million.
Sinton mill contributed 50,000 tons. When Sinton is fully operational, it will STLD is benefitting from strong metal-spread expansion, as the average realized
contribute 750,000 tons per quarter of available capacity, an increase of 28%. Steel price increased $251/ton sequentially to $1,292/ton, while the average ferrous
Fabrication hit a new record quarterly operating income of $467 million, nearly 30% scrap cost per ton melted increased only $67/ton sequentially to $439/ton. We
higher than the full-year segment operating earnings in ‘21. We expect steel forecast strong North American steel fundamentals to continue through the
fabrication to be a major driver of earnings growth, as a record backlog (both on remainder of ‘21, given the industry’s long lead times and historically high capacity
pricing and volumes) extends through Q1 ‘23. / Matthew Miller, CFA utilization. / Matthew Miller, CFA

March 30, 2022 April 21, 2021

11:05 AM ET... CFRA Keeps Buy Recommendation on Shares of Steel Dynamics Inc. 10:10 AM ET... CFRA Keeps Buy Opinion on Shares of Steel Dynamics, Inc. (STLD
(STLD 84.46****): 50.35****):
We increase our 12-month target price by $27 to $105, which values STLD at an EV/ We increase our 12-month target price by $17 to $58, which assumes STLD will
EBITDA of 4.5x our ‘22 EBITDA estimate, a discount to STLD’s three-year average trade at an EV/EBITDA of 5.0x our ‘21 EBITDA estimate, a discount to STLD’s three-
forward EV/EBITDA of 5.8x and nearly in line with peers’ average forward EV/EBITDA year average forward EV/EBITDA of 6.3x, as we account for the risk that the recent
of 4.3x. We raise our ‘22 EPS estimate by $3.55 to $17.05 and keep ‘23’s at $10.80. surge in steel prices could be unsustainable, causing tough comps in ‘22. We raise
Since the spot price for hot rolled coil fell below $1,000 per ton in late Feb., it has our ‘21 EPS estimate by $3.67 to $7.90 and ‘22’s by $1.05 to $4.10. STLD posts Q1
bounced back strongly to around $1,500 per ton. Chinese steel production in the adjusted EPS of $2.10 vs. $0.88, $0.11 above consensus, driven by a top-line beat of
first two months of ‘22 is down 10% versus the prior-year period, which should be 4.1%. The surge in prices for flat roll steel products was the biggest factor leading to
an indicator for lower steel imports into the U.S. market. Lower production from record highs for quarterly net sales, operating income, and adjusted EBITDA. The
China (accounting for 52% of global production) and Russia (5th largest steel- strong broad-based demand for steel products and lower customer inventories
producing country with 4% global share) has helped boost steel prices. We expect should be tailwinds for the majority of ‘21. STLD’s steel fabrication operations
nonresidential construction, heavy equipment, and automotive markets to expand in posted a record high quarterly shipment volume and ended Q1 with a record high
‘22. We think STLD will start gaining meaningful market share with the ramp-up of order backlog, 85% higher than the previous peak in backlog, which bodes well
its new Sinton, Texas flat roll steel mill. / Matthew Miller, CFA heading into the summer construction season. / Matthew Miller, CFA

January 26, 2022

01:43 PM ET... CFRA Maintains Buy Recommendation on Shares of Steel Dynamics
Inc. (STLD 54.97****):
We keep our 12-month target at $78, which assumes STLD will trade at an EV/
EBITDA of 3.8x our ‘22 EBITDA estimate, a discount to STLD’s three-year average
forward EV/EBITDA of 5.8x, which accounts for our view of peak steel prices and
peak earnings in ‘21. We increase our ‘22 EPS estimate by $1.15 to $13.50 and
initiate our ‘23 EPS forecast at $10.80. STLD posts Q4 adjusted EPS of $5.78 vs.
$0.97, $0.07 above consensus with a top-line beat of 0.4%. Q4 sales increased
104% Y/Y and adjusted EBITDA rose 317% Y/Y, driven by a 104% increase in average
steel price per ton and a 1.2% Y/Y increase in tons shipped. While the domestic steel
industry benefitted from a strong capacity utilization rate of 81% during ‘21, STLD
operated at a much stronger utilization rate of 91%, up from 86% for STLD during
‘20. Despite recent investor concerns about lower demand and overcapacity, we
continue to see positive steel market fundamentals, highlighted by strong
automotive and construction demand and resilient strength in prices. / Matthew
Miller, CFA

Note: Research notes reflect CFRA's published opinions and analysis on the stock at the time the note was published. The note reflects the views of the equity analyst as of
the date and time indicated in the note, and may not reflect CFRA's current view on the company.
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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Analysts Recommendations Wall Street Consensus Opinion

Buy/Hold

Wall Street Consensus vs. Performance

For fiscal year 2022, analysts estimate that STLD will earn
USD 21.60. For fiscal year 2023, analysts estimate that
STLD's earnings per share will grow by -54.43% to USD
9.84.

No. of
Recommendations % of Total 1 Mo.Prior 3 Mos.Prior
Buy 3 25 3 3
Buy/Hold 2 17 2 3
Hold 5 42 5 5
Weak hold 0 0 0 0
Sell 1 8 1 1
No Opinion 1 8 1 0
Total 12 100 12 12

Wall Street Consensus Estimates

Fiscal Year Avg Est. High Est. Low Est. # of Est. Est. P/E
2023 9.84 12.50 6.25 7 8.43
2022 21.60 22.21 20.85 6 3.84
2023 vs. 2022 q -54% q -44% q -70% p 17% p 119%

Q3'23 2.34 2.65 2.14 4 35.39

Q3'22 5.06 5.21 4.93 6 16.39
Q3'23 vs. Q3'22 q -54% q -49% q -57% q -33% p 116%
Forecasts are not reliable indicator of future performance.
Note: A company's earnings outlook plays a major part in any investment decision. S&P Global Market Intelligence organizes the earnings estimates of over 2,300 Wall Street analysts, and
provides their consensus of earnings over the next two years, as well as how those earnings estimates have changed over time. Note that the information provided in relation to consensus
estimates is not intended to predict actual results and should not be taken as a reliable indicator of future performance.
Note: For all tables, graphs and charts in this report that do not cite any reference or source, the source is S&P Global Market Intelligence.

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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
Glossary

STARS Abbreviations Used in Equity Research Reports

Since January 1, 1987, CFRA Equity and Fund Research Services, and its CAGR - Compound Annual Growth Rate
predecessor S&P Capital IQ Equity Research has ranked a universe of U.S. CAPEX - Capital Expenditures
common stocks, ADRs (American Depositary Receipts), and ADSs (American CY - Calendar Year
Depositary Shares) based on a given equity's potential for future performance. DCF - Discounted Cash Flow
Similarly, we have ranked Asian and European equities since June 30, 2002. DDM - Dividend Discount Model
Under proprietary STARS (Stock Appreciation Ranking System), equity analysts EBIT - Earnings Before Interest and Taxes
rank equities according to their individual forecast of an equity's future total EBITDA - Earnings Before Interest, Taxes, Depreciation & Amortization
return potential versus the expected total return of a relevant benchmark (e.g., EPS - Earnings Per Share
a regional index (MSCI AC Asia Pacific Index, MSCI AC Europe Index or S&P 500® EV - Enterprise Value
Index)), based on a 12-month time horizon. STARS was designed to help FCF - Free Cash Flow
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assist in determining the STARS ranking may be the result of the analyst's own FY - Fiscal Year
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inputs. P/NAV - Price to Net Asset Value
PEG Ratio - P/E-to-Growth Ratio
S&P Global Market Intelligence's Quality Ranking PV - Present Value
(also known as S&P Capital IQ Earnings & Dividend Rankings) - Growth and R&D - Research & Development
S&P Capital IQ Earnings & Dividend Rankings stability of earnings and dividends ROCE - Return on Capital Employed
are deemed key elements in establishing S&P Global Market Intelligence's ROE Return on Equity
earnings and dividend rankings for common stocks, which are designed to ROI - Return on Investment
capsulize the nature of this record in a single symbol. It should be noted, ROIC - Return on Invested Capital
however, that the process also takes into consideration certain adjustments ROA - Return on Assets
and modifications deemed desirable in establishing such rankings. The final SG&A - Selling, General & Administrative Expenses
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analysis of the scores of a large and representative sample of stocks. The range WACC - Weighted Average Cost of Capital
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A+ Highest B Below Average
Qualitative Risk Assessment
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A Above C Lowest
Reflects an equity analyst's view of a given company's operational risk, or the
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B+ Average D In Reorganization
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CFRA's earnings per share (EPS) estimates reflect analyst projections of future assigned to holdings of the fund.
EPS from continuing operations, and generally exclude various items that are
viewed as special, non-recurring, or extraordinary. Also, EPS estimates reflect STARS Ranking system and definition:
either forecasts of equity analysts; or, the consensus (average) EPS estimate, ««««« 5-STARS (Strong Buy):
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provider to CFRA. Among the items typically excluded from EPS estimates are by a notable margin over the coming 12 months, with shares rising in price on
asset sale gains; impairment, restructuring or merger-related charges; legal an absolute basis.
and insurance settlements; in process research and development expenses; ««««« 4-STARS (Buy):
gains or losses on the extinguishment of debt; the cumulative effect of Total return is expected to outperform the total return of a relevant benchmark
accounting changes; and earnings related to operations that have been over the coming 12 months.
classified by the company as discontinued. The inclusion of some items, such
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to which some types of data is disclosed by companies. benchmark over the coming 12 months.
««««« 2-STARS (Sell):
12-Month Target Price Total return is expected to underperform the total return of a relevant
The equity analyst's projection of the market price a given security will benchmark over the coming 12 months.
command 12 months hence, based on a combination of intrinsic, relative, and
««««« 1-STAR (Strong Sell):
private market valuation metrics, including Fair Value.
Total return is expected to underperform the total return of a relevant
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in price on an absolute basis.
Relevant benchmarks:
In North America, the relevant benchmark is the S&P 500 Index, in Europe and
in Asia, the relevant benchmarks are the MSCI AC Europe Index and the MSCI AC
Asia Pacific Index, respectively.

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Stock Report | September 10, 2022 | NasdaqGS Symbol: STLD | STLD is in the S&P Midcap 400
Steel Dynamics, Inc.
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