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CNBC’s Jim Cramer said on Wednesday he remained bullish on Nucor, even after the steelmaker – one of his favorite stocks in recent months – was downgraded by Goldman Sachs.
“When the best stocks of the breed are downgraded, you have to use that weakness to buy, not to sell. You rarely get that opportunity,” said the host of “Mad Money,” whose shares the charity trust owns. “Nucor is a world-class American manufacturer that rarely goes on sale – don’t look a gift horse in your mouth.”
Shares of North Carolina-based Nucor fell 2.75% in Wednesday’s session, closing at $ 95.99 apiece. That brings the stock down about 25% from its 52-week high of $ 128.81 on August 13.
The drop came after a Goldman analyst lowered his price target on Nucor to $ 108 per share from $ 123, while pushing the stock to a neutral rating from a buy. US Steel was similarly downgraded. In a note to clients, Goldman analyst Emily Chieng said historically high steel prices could change course.
Cramer said he understands the rationale for the call, as the analyst expects steel prices to decline.
“It’s just that I think they’re wrong [is] the decline will not happen the way they think it will. – There are many reasons why steel prices could remain completely resilient, ”Cramer said. ” The main reason ? Demand. There is a huge demand for steel, ”he said, pointing to the auto industry as a potential source of growth.
“Plus, if Congress ever passes this infrastructure bill, Wall Street will go crazy for steel stocks,” Cramer added.
The host of “Mad Money” also said that Nucor’s management team was in the midst of a share buyback program, which included repurchasing shares last quarter when they were trading at around. $ 100. “You could argue it was a bad time considering it’s now in the mid-90s, but I bet they continue to buy back their own stock with greed now that it’s down ten dollars from those. levels and that they have so much money, ”he said.
Disclosure: Cramer’s Charitable Trust owns shares of Nucor.
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