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If anything will cool a sector’s momentum, it is stock prices hitting highs and then an unfortunate item like the potential for trade tariffs pops up. That is exactly the twin storms that hit the steel industry. However, with President Trump speaking with President Xi of China on the trade issues, and prices falling back on the top steel stocks, one analyst feels there is some solid value.

In a new Jefferies research report, top-notch materials analyst Seth Rosenfield makes the case that while the sector and top steel stocks have run into a confluence of issues, the future still may be bright for some of the top companies. The report noted this:

Trade policy uncertainty has sparked a meaningful de-rating of US steel equities even as prices recently surged. Now, with momentum fading and a summer inflection likely, we question if steel stocks can work even as prices peak? While historical analysis highlights the strong correlation between steel equities/prices in a down-cycle, with bad news largely “priced-in” post derating, we continue to see attractive risk-reward for top US picks.

The following companies are the top U.S. steel picks at Jefferies. All are rated Buy.

Commercial Metals

This lesser known stock provides solid value for investors at current trading levels. Commercial Metals Co. (NYSE: CMC) manufactures, recycles and markets steel and metal products and related materials and services in the United States and internationally.

As one of the leading suppliers to the nonresidential construction sector, Commercial Metals has revived as that area of the market has picked up. The U.S. Architecture Billings Index (ABI), an economic indicator that provides 9-to-12-month growth forecast of nonresidential construction spending activity, which has shown very consistent growth.

Shareholders receive a 2.18% dividend. The Jefferies price target on the shares is $24, while the consensus target is $25.80. The shares traded early Wednesday at $22.20.

Nucor

This top steel company could do very well if the economy continues to pick up and the administration’s infrastructure push comes back to the forefront. Nucor Corp. (NYSE: NUE) is one of North America’s largest steel producers, with almost 27 million tons of finished steel capacity at 23 mini-mills throughout the United States. The company’s downstream steel products business includes rebar fabrication, steel joists/deck, cold finished bars, fasteners, building systems and wire mesh. Nucor also has 5 million tons of scrap processing capacity.

Nucor has always kept a very conservative balance sheet and is poised for slow but steady growth next year and beyond, especially if a huge infrastructure build-out becomes a reality. Some think that continued demand from the rebuilding of large parts of Houston after Hurricane Harvey and storm damage in Florida and Puerto Rico could also be a positive.

Nucor investors receive a 2.42% dividend. Jefferies has a $76 price target, while the consensus target is $75.36. The stock traded at $62.90 Wednesday morning.

Steel Dynamics

This is another company that Jefferies remains very positive on. Steel Dynamics Inc. (NASDAQ: STLD) operates six steel mini-mills in Indiana, Virginia, Mississippi and West Virginia. Production capacity has been nearly 10 million tons, of a total 110 million U.S. capacity. The company makes flat-rolled products, special/merchant bars and structural steel products. Steel Dynamics can process about 7 million tons of ferrous scrap and has a downstream operation that processes finished steel.

Shareholders receive a 1.35% dividend. The $54 Jefferies price compares with the $53.87 consensus target. Shares were last seen at $46.80.

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U.S. Steel

This venerable steel producer remains a favorite on Wall Street. United States Steel Corp. (NYSE: X) produces and sells flat-rolled and tubular steel products in North America and Europe. It operates through three segments. Its Flat-Rolled Products segment offers slabs, rounds, strip mill plates, sheets and tin mill products. This segment serves customers in the automotive, consumer and the combined industrial, service center and mining commercial markets.

The Tubular Products segment offers seamless and electric resistance welded steel casing and tubing, as well as standard and line pipe and mechanical tubing products primarily to customers in the oil, gas and petrochemical markets. The company also provides railroad services and owns, develops and manages various real estate assets.

And its U.S. Steel Europe segment provides slabs, sheets, strip mill plates, tin mill products and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves customers in the construction, service center, conversion, container, transportation, appliance and electrical, oil, gas and petrochemical markets.

Shareholders receive a 0.58% dividend. The Jefferies price target is $45. The consensus target is $45.67, and shares traded at $35.05.

The weak dollar has been helpful to the industry for the past 18 months, but it has begun to strengthen as the Federal Reserve interest rate increases kick in, so that tailwind is diminishing. With pricing firm, and export potential and demand at home still strong, these stocks make sense for growth investors, especially after significant price pullbacks.