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Reliance Steel (RS) Gains on Demand Strength, Acquisitions
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Reliance Steel & Aluminum Co. (RS - Free Report) is gaining from strong demand across key end-use markets, a diversified product base and strategic acquisitions.
Shares of Reliance Steel have gained 37.7% in the past year compared with 7% gain of the industry.
Image Source: Zacks Investment Research
Reliance Steel is benefitting from strong underlying demand in its major markets. It expects healthy demand trends to continue into the fourth quarter notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
The company witnessed strength in the semiconductors market in the third quarter of 2022 and expects this trend to continue in the fourth quarter. The company also witnessed sequentially higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace recovered during the third quarter and the company is cautiously optimistic that demand will continue to improve in the fourth quarter. It also expects demand in the energy (oil and natural gas) market to modestly improve in the fourth quarter.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Reliance Steel also remains committed to boost returns to shareholders. It repurchased around 1.9 million shares of its common stock for $336.7 million in the third quarter of 2022. The company also generated cash flow from operations of $635.7 million in the quarter.
Reliance Steel currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Commercial Metals Company (CMC - Free Report) .
Steel Dynamics has a projected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 7.3% upward in the past 60 days.
Steel Dynamics has a trailing four-quarter earnings surprise of roughly 6.2%. STLD has rallied roughly 74% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel currently carries a Zacks Rank #1. The consensus estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 65% in a year.
Commercial Metals currently carries a Zacks Rank #1. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 13.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 53% in a year.
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Reliance Steel (RS) Gains on Demand Strength, Acquisitions
Reliance Steel & Aluminum Co. (RS - Free Report) is gaining from strong demand across key end-use markets, a diversified product base and strategic acquisitions.
Shares of Reliance Steel have gained 37.7% in the past year compared with 7% gain of the industry.
Image Source: Zacks Investment Research
Reliance Steel is benefitting from strong underlying demand in its major markets. It expects healthy demand trends to continue into the fourth quarter notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
The company witnessed strength in the semiconductors market in the third quarter of 2022 and expects this trend to continue in the fourth quarter. The company also witnessed sequentially higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace recovered during the third quarter and the company is cautiously optimistic that demand will continue to improve in the fourth quarter. It also expects demand in the energy (oil and natural gas) market to modestly improve in the fourth quarter.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Reliance Steel also remains committed to boost returns to shareholders. It repurchased around 1.9 million shares of its common stock for $336.7 million in the third quarter of 2022. The company also generated cash flow from operations of $635.7 million in the quarter.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Zacks Rank & Key Picks
Reliance Steel currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Commercial Metals Company (CMC - Free Report) .
Steel Dynamics has a projected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 7.3% upward in the past 60 days.
Steel Dynamics has a trailing four-quarter earnings surprise of roughly 6.2%. STLD has rallied roughly 74% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel currently carries a Zacks Rank #1. The consensus estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 65% in a year.
Commercial Metals currently carries a Zacks Rank #1. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 13.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 53% in a year.