United States Steel Stock To $5?

How would you react if you held United States Steel stock (NYSE:X) and its value fell by 90% or more in the upcoming months? Although this might seem extreme, such an occurrence has happened before and could repeat itself. To the contrary, the stock has so far gained over 30% of its value year to date – including the recent 25% increase in the past month after Trump’s tariff announcements. But when one considers past data on how the stock performs during an economic downturn, a correction to less than $5 from near $45 at present may not be too far-fetched.

Interestingly, the recent performance of the stock is actually counterintuitive to its financial results. The company reported a net loss of $89 million, or $0.39 per diluted share, for the fourth quarter of 2024. On an adjusted basis, the net loss was $28 million, or $0.13 per diluted share. But the recent surge is primarily attributed to President Donald Trump’s directive on April 7, 2025, for the Committee on Foreign Investment in the United States (CFIUS) to reexamine Nippon Steel’s proposed $15 billion acquisition of U.S. Steel. This move has reignited investor optimism regarding the potential approval of the deal, which had been previously blocked by former President Joe Biden due to national security concerns.

Here’s the key point: The key takeaway is that during a downturn, United States Steel stock might incur substantial losses. The stock lost 56% during the inflation shock and 57% during the Covid crisis. But the biggest of them all is that during the financial crisis of 2009, the stock lost 91% from its peak. That’s not a mistake. Markets can be ridiculous in the face of macro fears. Is there any similarity between the company’s current fundamental position and that of the company during the financial crisis?

In March 2009, United States Steel reported full year 2008 record net income of $2.13 billion, and the stock was trading at about 2 times the earnings. X’s earnings in the last twelve months was $0.38 billion – indicating a yield of 4% on a market cap of $10 billion. So what? Given the higher valuation multiple, could the stock witness a similar meltdown? Maybe not as severe – with over a decade and a half of business and investor confidence, the company would be in a much better position compared to 2009. However, concerns would remain. Naturally, individual stocks are generally more volatile than diversified portfolios. Therefore, if you are looking for growth with reduced volatility, you might consider the High-Quality portfolio, which has outperformed the S&P 500 and generated returns of over 91% since its inception.

Here are a few key pointers on how resilient is United States Steel stock during an economic downturn: