Goldman Sachs has opened coverage on two U.S. steel-focused companies with Buy recommendations, arguing that higher domestic steel prices and supply constraints created by section 232 tariffs support improved economics for domestic producers.
In the bank's view, tariffs have raised import costs and limited external supply, while demand for steel is set to be bolstered by above-average growth in infrastructure and selective expansion in private non-residential construction. Goldman said it prefers lower-beta firms that can accelerate free cash flow and expand through-cycle margins through metal margin improvement and a broader product mix.
Nucor Corp.
Goldman Sachs started coverage on Nucor Corp. with a Buy rating and a 12-month price target of $210. Described as the largest steelmaker in the United States, Nucor produces about one quarter of the country's steel output. The firm also highlighted Nucor's role as the largest scrap recycler in the U.S., noting this vertical integration as a structural cost advantage that helps the company maintain stronger through-cycle margins by exerting greater control over input costs compared with peers.
The bank cited three central reasons supporting its positive stance on Nucor: an expectation that Nucor will outperform the broader U.S. steel market thanks to rising end-market demand; potential gains in import share; and volume growth tied to the company’s West Virginia mill. Goldman also pointed to structural cost advantages that it believes will support margin expansion as Nucor transitions from a period of heavy capital expenditure to a phase focused on harvesting free cash flow.
Nucor provided first-quarter 2026 earnings guidance in a range of $2.70 to $2.80 per diluted share, and the company indicated it expects earnings to rise across all operating segments versus the fourth quarter of 2025. The broader analyst community’s activity noted in the bank’s write-up included a new Sector Weight rating from KeyBanc and a reiterated Buy rating from BofA Securities.
Commercial Metals
Goldman Sachs also initiated coverage on Commercial Metals with a Buy rating and a 12-month price target of $74. The firm described Commercial Metals as the largest U.S. producer of steel reinforcing bar - a product central to the construction sector - and views the company as a leveraged play on non-residential and infrastructure construction, which Goldman expects to grow meaningfully over the next 12 to 18 months.
Goldman highlighted Commercial Metals' strategic moves through the acquisitions of CP&P and Foley, which it says continue to diversify the company’s product mix as it evolves into more of a construction solutions provider. The bank projects that the construction-focused segment will grow to represent more than 25 percent of the company’s segment EBITDA by 2028. Goldman also expects Commercial Metals to sustain higher through-cycle margins that should allow the company to capture more upside while experiencing less margin volatility.
The Buy rating for Commercial Metals rests on strong North American end-market demand, exposure to U.S. regions with above-average growth, both inorganic and organic drivers of margin expansion, and a company emphasis on balance-sheet health and cash flow generation. In recent reporting, Commercial Metals posted fiscal second-quarter 2026 adjusted earnings of $1.16 per share - a result that missed analyst expectations - while revenue of $2.13 billion topped forecasts. KeyBanc maintained a Sector Weight rating on the company.
What Goldman is emphasizing
Across both coverage initiations, Goldman is focusing on companies that combine exposure to a tariff-influenced domestic pricing environment with operational advantages and strategic diversification that can lift margins and support free cash flow. The firm’s preference for lower-beta names reflects an emphasis on balance-sheet resilience and predictable cash generation during a period where higher prices and constrained imports could reshape competitive dynamics in the U.S. steel industry.
Analyst activity and recent results
Alongside Goldman’s new coverage, other analysts have been active: KeyBanc issued a new Sector Weight rating on Nucor, and BofA Securities reiterated a Buy on the company. For Commercial Metals, KeyBanc reiterated its Sector Weight rating following the company’s recent earnings and revenue results.
Note: The coverage and company-specific guidance and results above reflect information as presented by the companies and as summarized by Goldman Sachs in its initiation reports.