U.S. Steel  (X - Get Report) stock is climbing by 3.93% to $20.09 in late-afternoon trading on Tuesday, as the recent rally in steel prices propels shares of the Pittsburgh-based steel producer higher.

Hot rolled coil (HRC) prices have soared by more than 30% in the past eight weeks, Barclays wrote in a note this morning.

"The reality is that domestic supplies are tight, scrap prices are gapping up, and import availability is thin just as activity picks up for the spring," the firm mentioned.

Although U.S. steel still looks expensive, shares should benefit in the near-term from the momentum driving HRC pricing higher, Barclays contended.

The firm upped its price target to $15 from $7 on the stock, but cautioned that steel pricing will likely retreat in the second half of 2016 as "overseas production ramps back up and domestic scrap flows improve."

Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.

U.S. Steel's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: X

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

 

Source : thestreet.com

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