NUE

Nucor is a high-quality cyclical caught mid-cycle. Earnings have fallen hard from the 2021–22 peak: net income slid from $7.61B (FY2022) to $1.74B (FY2025), and FY2025 itself was down another 14% YoY with diluted EPS off 11.1% to $7.52. That collapse pushes net margin to just 5.4% and ROE to 8.3% — both well below this franchise's through-cycle norms. So the headline P/E of 32.4 is rich on its face, but it's measuring price against depressed, near-trough earnings rather than a structurally expensive business. The MD&A supports a 'bottoming' read: full-year mill operating rates rose to 83% from 76%, with strong demand in infrastructure, data centers, energy and advanced manufacturing offsetting soft auto and residential. P/S of 1.7x on $32.5B revenue (up 5.7%) is not demanding.

The balance sheet is the anchor of the bull case: $20.9B equity against $13.0B liabilities (0.62x), current ratio near 3x ($11.8B vs $4.00B), $2.26B cash, and current debt cut to just $66M. That fortress lets management keep reinvesting through the cycle — but note capex of $3.42B (+7.8%) now exceeds operating cash flow of $3.23B (-18.7%), and cash fell 36.5% on the year while buybacks were throttled back 68% to $700M. Nucor is spending into a downturn to position for the next upswing, which is the right long-term move but pressures near-term free cash and explains the shrinking cash pile.