President Trump is considering allowing Japan’s Nippon Steel (JP:5401) to complete its $14.1 billion acquisition of steelmaker U.S. Steel (X), according to a CBS News report. This decision would be a reversal of Trump’s earlier stance, as he had initially opposed the deal on Truth Social in December. However, it is important to note that Trump has not made a final decision yet.
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Trump is scheduled to meet with Japanese Prime Minister Shigeru Ishiba to discuss the merger, along with automotive issues and tariffs. Meanwhile, Nippon Steel had previously proposed giving the U.S. government veto authority over changes to U.S. Steel’s production capacity in order to reduce the concerns surrounding the impact on domestic steel output and workforce.
Separately, it is also worth mentioning that Nippon Steel and U.S. Steel have submitted a lawsuit against the U.S. by alleging that former President Joe Biden blocked the merger for political reasons and violated their due process. Indeed, the companies argue that the transaction will enhance, not threaten, U.S. national security.
Is X Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on X stock based on three Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 12% decline in its share price over the past year, the average X price target of $39.80 per share implies 2.2% downside risk.
