12:05 PM EST, 12/12/2024 (MT Newswires) -- Nucor's ( NUE ) product margins are likely to remain pressured, with the steel plates' market conditions to weigh on earnings and volumes continue to rise in an already weak sector, UBS Securities in a note Wednesday.

"We see limited upside in the near term," UBS said, noting the company's "weak" Q3 beat and "soft" Q4 outlook.

The investment firm also said it does not expect a strong recovery in the plate market in the near term and market challenges could extend through early 2025 amid soft infrastructure spending, delays, and cancellations.

In addition, UBS said it sees Nucor's ( NUE ) elevated capital expenditures weighing on the company's 2025 and 2026 free cash flow, while the benefits of its West Virginia project will not accrue until 2027.

UBS downgraded Nucor ( NUE ) to neutral from buy, with a lower price target of $156 from $171.

Shares of Nucor ( NUE ) were down more than 5% in recent trading.

Price: 131.40, Change: -7.04, Percent Change: -5.09