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The analysts also introduced X stock as a new Top Pick in the firm’s mining sector research coverage, citing the expected value creation from the company’s “transformational investments.”
“Our call is supported by the ongoing strategic review process to potentially sell assets/the company, which highlights the value of X’s growth initiatives,” they said in a client note.
The mentioned transformation involves an expansion of the company’s Electric Arc Furnace (EAF) capabilities and the development of high-value downstream products. A key highlight of this transformation is the construction of the state-of-the-art 3.0 million tons per annum Big River 2 (BR2) mini mill, scheduled to become operational in 2024.
This way, BR2 will nearly double US Steel’s EAF steelmaking capacity. Moreover, US Steel is enhancing its presence in downstream products through the construction of a 325,000-tons per-annum galvanizing line and a 200,000-ton-per-annum non-grain-oriented (NGO) electrical steel line in collaboration with BR2.
US Steel shares rose nearly 2% in early Monday trade.
