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This steel play will rally more than 20% on Trump's infrastructure plan, trade policy, JPMorgan says

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Investors should buy Steel Dynamics shares because the steel maker will report earnings above expectations this year, according to JPMorgan, which reiterated its overweight rating on the company.

"We think low inventory levels and healthy lead times, imports constrained by trade cases, and potential further trade actions will all help support steel sheet prices," analyst Michael Gambardella wrote in a note to clients Wednesday. "STLD has leverage to any higher prices, while increases in infrastructure spending could meaningfully benefit its long products operations."

Steel Dynamics shares are up 19 percent since the Nov. 8 election through Wednesday on optimism over President Donald Trump's economic agenda. The company reported fourth-quarter sales results slightly higher than Wall Street expectations on Tuesday.


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