Jefferies analyst Chris Lafemina lowered its rating to US Steel (NYSE:X) after President Trump approved a potential partnership between the company and Nippon Steel Corp. (OTC:NPSCY). Lafemina also raised its price target from $50 to $55, the price Nippon agreed to pay when it fully takes over.

U.S. Steel shares rose 21% on Friday, May 23, as the market appears to have been considered in a potential Nippon acquisition. However, Lafemina believes the details of the agreement remain blurry, and he believes that he is cautious before confirming more specific details. He also noted that the deal could adopt a complex partnership structure, which could be much less value than a complete merger would offer. Considering that the stock has reached the asking price, his conservative position seems to make sense and there seems to be limited upside.

The steel rings were loaded into the facility for further processing and distribution.

It should be noted that the original deal dates back to December 18, 2023, when Nippon Steel announced its agreement to acquire U.S. Steel for $55 per share in an all-cash deal. The offer represents a 40% premium and is valued at a total corporate value of $14.9 billion.

At that time, after necessary approval, the transaction was expected to be completed in the third quarter. But the Biden administration has stopped it due to national security issues and union pressure.

Now, the deal is expected to generate at least 70,000 jobs and $14 billion in domestic investment. President Trump plans to visit U.S. Steel's Pittsburgh plant on May 30, with more deal details likely to appear.

US Steel Corporation (NYSE:X) is a leading steel manufacturer operating in the United States and Central Europe. Its annual raw steel production capacity is 25.4 million tons (20.4 million tons in North America and 50 million tons in Europe).

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