Billionaire Dan Loeb, via his firm Third Point, just made a bold bet on United States Steel (X). In a letter to investors, Loeb revealed a meaningful stake in the company, signaling his confidence that the long-delayed $14 billion merger with Japan’s Nippon Steel (NPSCY) will eventually go through.

Former President Joe Biden initially blocked the deal, citing national security concerns. Once seen as dead, the deal now flickers with possibility after President Donald Trump ordered a fresh national security review. While Trump has voiced opposition to foreign control of U.S. Steel, he previously stated he “wouldn’t mind” Nippon taking a minority stake. 

Loeb sees the merger as industrially sound and strategically aligned with “America First” manufacturing goals - a message likely to resonate under Trump-era policies that favor domestic manufacturing and tariffs.

X stock popped briefly on the news as investors tried to decode what Loeb’s bet meant. With Third Point now in the mix and the steel giant back in Washington’s spotlight, if Dan Loeb sees upside in U.S. Steel, should you?

About United States Steel Stock

Founded in 1901 and rooted in Pittsburgh, U.S. Steel (X) grew into a steel (HVN25) producing titan of American industry.

Shares of industrial metal producers hit a shiny $46.18 peak in early April before cooling off. Still, X stock has been on a strong climb, up 22.3% on a YTD basis.

U.S. Steel Tops Q1 Forecasts

On May 1, it posted its Q1 results that beat expectations on both revenue and profit. Even as the top line slid 10.4% year over year to $3.7 billion, it still cleared Wall Street’s bar by 4.7%. The adjusted loss per share landed at $0.39.

Total shipments clocked in at 3.759 million tons, down just 1.2% from a year ago. Flat-Rolled saw a 3.1% dip in steel shipments to 1,985,000 tons and a 6.6% drop in average prices. But the Mini Mill unit lit up the scoreboard with shipments soaring 37.7% to 782,000 tons, even though prices slid over 22%.  

Europe, however, lagged, with volumes down 20% and pricing down 12%. Tubular products saw shipments jump 19.3%, although prices tumbled nearly 24%. Cash reserves thinned out to $594 million, nearly halving from last year, while long-term debt held steady at $4.05 billion.

U.S. Steel is looking ahead with guarded optimism. For Q2, it sees adjusted EBITDA landing between $375 million and $425 million. In North America, the Flat-Rolled segment is set to rebound, thanks to smoother mining logistics and stronger steel prices, but planned maintenance will tap the brakes. The Mini Mill’s looking stronger too, as Big River 2, a showcase of American innovation in steelmaking, ramps up with higher prices and volume, even if it comes with a $50 million growing pain of ramp-up costs.

Meanwhile, the Europe segment is anticipated to be still sluggish, with gains likely wiped out by seasonal upkeep. The tubular segment is expected to stay steady, and rising prices help cushion cost bumps. Despite the moving pieces, U.S. Steel expects free cash flow to turn positive as early quarter headwinds start to fade.

Analysts tracking the company expect f2025 profit to decline 37% year over year to $1.21 per share, and then rise by 122% to $2.76 per share in 2026.

What Do Analysts Expect for U.S. Steel Stock?

Wall Street is feeling cautiously optimistic about the steelmaker, and X has a “Moderate Buy” consensus rating overall. Of the nine analysts in coverage, four recommend a “Strong Buy,” and five suggest a “Hold” rating.

X’s mean price target of $41.71 is roughly in line with its current trading price.