There has been no shortage of drama surrounding steelmaker U.S. Steel (NYSE:X). Buyers have come, buyers have gone, and yet the process continues to draw interest. Not to mention bidders; in fact, U.S. Steel is up somewhat in Wednesday afternoon’s trading thanks to reports that a new bidder may get in on the fray, and U.S. Steel may ultimately be, at least somewhat, Japanese Steel.
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The latest reports suggest just that, saying that Nippon Steel (OTHEROTC:NISTF) might join in the hunt for U.S. Steel and may even team up with ArcelorMittal (NYSE:MT) in order to get the job done. The reports note that the duo already have joint ventures together, so teaming up for one more would hardly be out of line. In addition, the bidding process may already be “pretty advanced,” and a winner may be announced in the next few weeks.
The recent frenzy around U.S. Steel has sent shares on an upward track over the last few weeks. But, as some point out, if the whole thing doesn’t pan out and U.S. Steel has no buyer, the stock will likely retrace its gains, and quickly. Most of the gains are due to that buyout process, so if no one wins, then it will likely hurt investors just as hard. Given the sheer number of potential buyers, though, this seems like an unlikely outcome.
Is U.S. Steel a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on X stock based on one Buy, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average X price target of $22.89 per share implies 31.45% downside risk.
