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If you're paying attention to this industry, the Schnitzer Steel stock forecast looks bright.
Portland-based Schnitzer Steel Industries Inc. (NASDAQ: SCHN) manufactures steel and recycles scrap metal. The company has been around for over a century, and with American infrastructure investments on the rise, Wall Street sees it in line for a pop over the next year.
Really, steel stocks everywhere are on the move. But Schnitzer is the latest potential grower.
Van Eck Vectors Steel ETF (NYSEArca: SLX) climbed 44% since February. But Money Morning's Chris Johnson says the steel stock could still "double in six to eight months."
Check out this Schnitzer stock forecast to see what makes it a stock to buy now...
Schnitzer Steel Stock Price Prediction
Northland Securities gives Schnitzer Steel an $80 target price from today's $50. That's a solid 60% gain over 12 months, if things go as planned.
You see, steel prices overall are rising with what Chris Johnson calls the "largest infrastructure spending initiative in decades."
Yes, steel prices in general already exploded in the first half of 2021. But some steel producers have nearly doubled their value.
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Look at this as a classic supply-demand struggle. Similar to the chip shortage, as hype grew around self-driving cars and 5G, we're seeing money flow into American steel with the latest White House administration's infrastructure budget.
The difference is that there are more steel makers out there, so we're not likely to get a chip shortage.
So, then why Schnitzer and not some other global steel giant?
Again, the focus here is on American steel. Three of the top five steel producers in the world are Chinese.
And if you've been paying any attention to world politics lately, there's little chance the United States would tap a Chinese steel manufacturer to prop up its own infrastructure.
Today presents not only a good opportunity to build American buildings, but also to use American steel to do it.
That's why everyone is so excited about American steel stocks right now.
But here's why you should keep your eye on steel in general.
Why Watch the Steel Industry Today?
The technicals present a great case for 60% growth in Schnitzer stock. In fact, the technical picture for the steel industry reveals even more potential in the next six months.
One analyst says every dollar invested in steel could be worth two by Christmas.
Now, of course, we wait to learn more about the government's plan for building infrastructure. It's one thing to know the government wants to spend more. It's another thing to consider how they will go about it.
Congress could go back and forth on an infrastructure bill for months. The bill could even die when all is said and done - but that's far from happening as of now. Neither would be good for steel.
Though, Chris Johnson believes we'll get "at least some" of the steel spending we need to lift these steel stock prices.
Chris even says analysts are "lowballing price expectations." He goes further to say that steel valuations are "freakishly low" right now.
With interest growing in Schnitzer stock, don't be surprised if analysts raise their 12-month targets even higher over the next few weeks.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.