Nucor CorporationNUENYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Buy

Fair Value: $227.86 per share(market-calibrated)

+26.2%

Upside to Fair Value

Current

$180.57

Pure Model

$228.09

Fair Value

$227.86

Bull Case

$273.05

Bear Case

$181.81

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

2.09%

Calibrated Growth

2.21%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $228.09.

What's Driving This Ratingfor NUE

↓

CapEx normalizing toward maintenance

Historical CapEx is 7.62% of revenue (heavy investment phase). Model fades this to 4.00% by Year 10, freeing up ~$1.5B in annual FCF. This is the biggest driver of long-term cash flow improvement.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 9.84% in Year 1 to -1.69% by Year 5 (per analyst consensus). That's below the 2.25% terminal rate, so growth re-accelerates in Years 6-10 — a generous assumption. This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $182.34/share (11.4x terminal FCF) while exit multiple gives $273.83/share (22.4x terminal FCF). The 14x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 2.25% growth is more conservative. The base case averages both methods.

✓

Model and market roughly agree

Market-implied terminal growth of 2.09% is close to the model's 2.25% (only 16bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 62.38% indicates efficient cash generation. FCF reaches $5.5B by Year 10 (13.26% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.84

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)12.79%

Cost of Debt

Pre-tax Cost of Debt2.57%

Tax Rate20.64%

After-tax Cost of Debt2.04%

Equity Weight (E/V)85.40%

Debt Weight (D/V)14.60%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (85.40% × 12.79%) + (14.60% × 2.04%)

= 11.22%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$35.7B	$38.6B	$40.4B	$40.0B	$41.7B
EBIT	$6.3B	$6.8B	$7.1B	$7.0B	$7.3B
Tax	$1.3B	$1.4B	$1.5B	$1.5B	$1.5B
NOPAT	$5.0B	$5.4B	$5.6B	$5.6B	$5.8B
+ Depreciation	$1.3B	$1.4B	$1.5B	$1.5B	$1.5B
- Capex	$2.7B	$2.6B	$2.4B	$2.1B	$1.7B
- Δ NWC	$526M	$212M	-$114M	-$7M	$151M
Free Cash Flow	$3.0B	$4.0B	$4.8B	$5.0B	$5.5B
Discount Factor	0.899	0.727	0.588	0.475	0.345
Present Value	$2.7B	$2.9B	$2.8B	$2.4B	$1.9B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$5.5B

Terminal Growth Rate2.25%

WACC11.22%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$63.1B

PV of Terminal Value$21.8B

Exit Multiple Method

Year 10 EBITDA$8.9B

Exit Multiple (EV/EBITDA)14.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$124.2B

PV of Terminal Value$42.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$25.2B

PV of Terminal Value$21.8B

Enterprise Value$46.9B

(-) Net Debt$4.9B

Equity Value$42.1B

Shares Outstanding231M

Price per Share$182.34

Exit Multiple Method

PV of Projected FCFs$25.2B

PV of Terminal Value$42.9B

Enterprise Value$68.0B

(-) Net Debt$4.9B

Equity Value$63.2B

Shares Outstanding231M

Price per Share$273.83

Pure Model Fair Value

$228.09

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
9.22%	$273.23	$277.78	$282.98	$288.99	$296.00
10.22%	$246.03	$249.32	$253.02	$257.21	$262.00
11.22%	$222.94	$225.38	$228.09	$231.12	$234.52
12.22%	$203.02	$204.87	$206.90	$209.15	$211.65
13.22%	$185.63	$187.05	$188.61	$190.32	$192.20

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$181.81

0.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 2.30

Base Case

$228.09

26.3% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 1.84

Bull Case

$273.05

51.2% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 1.57

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Basic Materials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth9.84%

Year 3 Revenue Growth3.46%

Year 5 Revenue Growth-1.69%

Year 7 Revenue Growth-0.11%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin17.60%

Tax Rate20.64%

Historical Capex / Rev7.62%

Terminal Capex / Rev4.00%

NWC / Revenue16.45%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 14x EV/EBITDA (Basic Materials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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