In 2008 the stock reached a P/E ratio low of 5; with EPS of $6.01 in FY 2008 the stock price reached a low of 5*$6.01=$30. Today we are expecting the similar outcome to due a negative economic outlook for the short-term. In FY 2019 the company reached EPS of $4.14. Comparing to 2008 we expect the stock to reach a P/E ratio of 5, indicating that the stock price could tumble to 5*$4,14 = $20.7 and stabilize at that level. As the economic prospects rise, the P/E ratio is likely to reach the company’s average level around 12. Under the assumption that EPS growth back to previous levels (>$4.0) the stock price should bounce back to 12*$4 = $48.
Trading idea
Entry price: $25 Take profit: $40 Max expected holding period: 18-month Profit: 60%
I`ll buy the stock as soon as it hits $25. The financial outlook of NUE looks decent and should sustain the COVID-crisis.
I had already bought 31.6$. Should I sell once and then buy again?
PeterLang_7
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@kochan0720, hi, no it depends on your strategy, my thought was to buy it as it hits $25. Now of course the price went up and it might not reach 25$. Watch out the release of Q12020 report on 28.April 2020!