U.S. Steel Stock Recovers as Merger Review Pushed Back

The U.S. Committee on Foreign Investment (CIFUS) is reportedly pushing back the Nippon merger review

United States Steel Corp (NYSE:X) is back in the news today, after a Reuters report indicated the U.S.’ Committee on Foreign Investment (CIFUS) granted a request from both companies to push back the review of the Nippon merger 90 days. The decision will now come after the Presidential election, giving CIFUS time to weigh the national security implications. 

U.S. Steel stock is up 3.5% to trade at $37.49, on track for its fifth win in the last six trading days. X has essentially filled the 17.5% bear gap suffered on Sept. 4, when Vice President Kamala Harris publicly expressed hope that the company — an American institution and at one point one of the largest corporations in the world — remain in U.S. hands. Year-to-date, the shares are down 23.2%.  

Last week, the steel stock was upgraded by J.P. Morgan Securities, notable because seven of the nine brokerages in coverage now maintain “buy” or better ratings. And considering the 12-month consensus price target of $42.16 is a 12% premium to the equity’s current perch, there’s a lot of analyst optimism around a stock that has struggled to take off this year and a fate tied to a potentially looming merger. 

Call traders could be hedging their bets on the merger’s fate. The stock’s Schaeffer’s put/call open interest ratio (SOIR) of 0.88 ranks in the 4th percentile of its annual range, showing there is an unusual call-skew in the front three-months’ series.

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