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Steel stocks like U.S. Steel (X), AK Steel (AKS), Steel Dynamics (STLD), and Nucor (NUE) have been battered in 2017, but haven't done too badly over the past 12 months, which puts investors in a precarious position: Buy or sell?

Akos Stiller/Bloomberg

So much has depended on the price of steel--and the ability of companies to convert them into earnings. And in a report today, Macquarie analysts David Lipschitz and Xiao Feng contend that the "price outlook has stabilized," and they "don’t believe prices will plunge to the lows seen in the previous cycle, as inventories and lead times remain supportive." That's a great environment for U.S. Steel, they claim, as they start the stock with an Outperform rating and a $31 target price. They explain why: