NUCOR CORP (NUE) stock intrinsic value fair value estimate & owner earnings analysis

Nucor is the largest U.S. steelmaker built on electric arc furnaces: it melts scrap (and scrap substitutes from its own raw-materials segment) into sheet, plate, structural beams and bar, and then turns a fifth of that steel into its own downstream products - joists and deck, rebar fabrication, tubing, metal buildings, and overhead and high-speed doors (CHI, and Rytec, bought in July 2024 for about $565 million). In 2025 the mills shipped about 19.8 million tons to outside customers, almost entirely in the United States, Canada and Mexico, and ran at about 83% of capacity; the products businesses ran at about 62%. Earnings are driven by the spread between steel prices and scrap costs, so they swing hard with the steel cycle. How we measured earning power. We take operating cash flow, strip out working-capital swings, charge stock compensation as a cost, and deduct capital spending except the part that funds revenue growth. On that basis, cash earnings per share over 2016-2025 were: $3.30, $5.27, $8.25, $2.71, $2.89, $24.96, $28.87, $15.62, $2.17 and $1.82. Adding back the cash interest paid gives the cash the business makes before its lenders: $3.88, $5.85, $8.77, $3.28, $3.49, $25.54, $29.75, $16.64, $3.25 and $3.04 a share. Two things distort that record. First, the 2024 and 2025 figures are low partly because Nucor spent $3.17 billion and $3.42 billion on capital projects - mostly new capacity such as the West Virginia sheet mill, an Arizona melt shop and a South Carolina galvanizing line - while revenue fell, so our method counts nearly all of that spending as upkeep. We did not add it back; it stays in the record as a conservative choice. Second, the business is roughly twice as large per share as in 2016: revenue per share rose from about $51 to about $141, helped by a share count that fell from 321 million (2017) to 229 million and by acquisitions. So instead of taking the plain median of per-share figures (about $4.86, dominated by a smaller company) or the median since 2021 (about $16.64, dominated by the 2021-2023 price boom), we take the full ten-year cycle's median cash margin before interest - 8.5% of revenue - and apply it to the median revenue per share of the business as it has existed since 2021 ($138.63). That gives a mid-cycle level of about $11.72 a share. In 2025 this cash figure fell 6.5%; we start the base case at the mid-cycle level rather than below it because the first half of 2026 already shows the turn: revenue $19.9 billion versus $16.3 billion a year earlier, operating cash flow $2.29 billion versus $1.10 billion, and capital spending down to $1.23 billion from $1.81 billion, with full-year 2026 spending guided at about $2.5 billion. Growth we credit, and what we leave out. The only growth credited is the West Virginia sheet mill in Mason County: construction began in the third quarter of 2023, it is expected to be finished by the end of 2026, it will cost about $4 billion (about $3.65 billion net of the State of West Virginia's $350 million), and it adds about 3 million tons of capacity. Run at the 83% rate Nucor's mills achieved in 2025, at 2025's average mill price of $1,008 a ton and the 8.5% mid-cycle margin, it adds about $0.93 a share a year, half in 2028 and fully from 2029. We give no credit to market growth, price increases, buybacks or new acquisitions. Beyond ten years the base case holds earning power flat: Nucor's mills have run for decades, and the cost of keeping them running is already deducted every year. Cases. Base case: about $11.72 a share for the first year, rising to $12.65 as the West Virginia mill ramps, held there - the business is worth about $48.0 billion ($209.56 a share). Nucor owns 51% of three joint ventures (Nucor-Yamato, California Steel Industries and NJSM) whose cash flow is counted in full; the partners' share, set at 7.6% of the total (the ten-year median share of earnings they received), is worth about $3.6 billion ($15.93 a share). The company owes about $7.1 billion in debt and finance leases, holds about $2.7 billion of cash and short-term investments (we keep $0.5 billion back as operating cash), and much of its debt is long-dated at fixed rates well below 6% - for example 2.979% notes due 2055, 3.85% due 2052 and 3.125% due 2032 - which is worth about $0.6 billion to shareholders. Net debt is therefore about $4.3 billion ($18.73 a share), leaving about $174.91 a share. Bear case: Section 232 tariff protection, fully reinstated in 2025 without exemptions, is relaxed again (a risk the company names), imports return, and the new West Virginia tons only displace volume at Nucor's existing mills that already run at 83%. Cash earnings stay at the 2024-2025 level of about $3.10 a share for three years and then settle at the plain ten-year median of about $4.86 a share with no recovery - about $17.5 billion ($76.30 a share); the partners' share is taken at 13.5% (their share in 2024-2025), about $2.4 billion; less $4.3 billion of net debt leaves about $47.27 a share. Even here cash before interest covers the roughly $281 million annual interest bill more than twice, and the nearest maturities ($532 million in 2027, $553 million in 2028) are smaller than cash on hand. Bull case: the 2025 tariff regime holds, the first-half 2026 pace (about $17.40 a share a year) lasts two years, and thereafter margins match 2023's 12% (the median since the business reached its present size) plus a full West Virginia contribution, about $17.95 a share - worth about $68.3 billion; less $5.2 billion for the partners and $4.3 billion of net debt leaves about $256.80 a share. Compared with our previous estimate (bear $4.46, base $98.34, bull $222.91), the value is higher mainly because each case is now discounted at a single 6% rate rather than 8.5%-12%, and because earning power is measured at the company's present size. Two changes cut the other way: we no longer assume 2%-6.5% yearly growth after the new mill, and we now subtract the joint-venture partners' share. Where we could be wrong: if 2024-2025 margins near 2% prove to be the new normal rather than the bottom of a cycle, the base case is too high; if tariffs keep imports out for years, it is too low. Margin-of-safety price. Because outcomes range from about $47 to about $257, the margin-of-safety price is set well below the $175 base, at $85. From $85, a move to the base value within about four years, plus the roughly $2.20 a share paid in dividends each year, implies about 20% a year, while the bear case value equals a little over half of that price.