Shares of Nucor Corp. fell sharply Tuesday as an analyst cut her profit estimates and downgraded the steel maker, which she said has little room for margin expansion in a shrinking market.
UBS analyst Timna Tanners cut her 2009 earnings per share estimate to $3.80 from $5 and reduced her 2010 per share estimate to $4.70 from $5. Analysts surveyed by Thomson Reuters expect earnings of $4.28 per share in 2009 and $4.93 per share in 2010.
Tanners also downgraded Nucor to "Neutral" from "Buy" and raised her price target to $50 from $48.
Nucor's "relative outperformance" since its peak in mid-May limits the upside, she said in a note to investors.
The analyst said she cut her estimates for Nucor to conform with her lower forecast for steel prices and volume due to continuing efforts to reduce inventory and weak construction markets.
Nucor's strong balance sheet and infrastructure exposure appear discounted, Tanners said.
Shares fell $1.75, or 3.7 percent, to end at $45.57.