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Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have popped 13.9% over the past six months. The company has also outperformed its industry’s decline of 4.3% over the same time frame. It has also topped the S&P 500’s roughly 6.4% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Image Source: Zacks Investment Research
What’s Going in RS’s Favor?
Better-than-expected earnings performance in the third quarter of 2022 and upbeat prospects have contributed to the gain in the company's shares. Reliance Steel’s adjusted earnings of $6.48 per share for the third quarter topped the Zacks Consensus Estimate of $6.20. Revenues went up 10% year over year to $4,247.2 million and surpassed the Zacks Consensus Estimate of $4,163.4 million.
The top line, in the third quarter, was driven by healthy demand in many of the company’s end markets and strong operational execution. The company benefited from the recovery in aerospace and energy and continued strong performance in the semiconductor market.
Reliance Steel is gaining from strong underlying demand in its major markets. The company witnessed strength in the semiconductors market in the third quarter and expects this trend to continue in the fourth quarter. It also saw 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.
Reliance Steel expects healthy demand trends to continue into the fourth quarter of 2022 notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
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.
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 51% in a year.
Commercial Metals currently carries a Zacks Rank #1. The 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 49% in a year.
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 80% in a year. The company currently carries a Zacks Rank #2.
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Reliance Steel's (RS) Shares Rise 14% in 6 Months: Here's Why
Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have popped 13.9% over the past six months. The company has also outperformed its industry’s decline of 4.3% over the same time frame. It has also topped the S&P 500’s roughly 6.4% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Image Source: Zacks Investment Research
What’s Going in RS’s Favor?
Better-than-expected earnings performance in the third quarter of 2022 and upbeat prospects have contributed to the gain in the company's shares. Reliance Steel’s adjusted earnings of $6.48 per share for the third quarter topped the Zacks Consensus Estimate of $6.20. Revenues went up 10% year over year to $4,247.2 million and surpassed the Zacks Consensus Estimate of $4,163.4 million.
The top line, in the third quarter, was driven by healthy demand in many of the company’s end markets and strong operational execution. The company benefited from the recovery in aerospace and energy and continued strong performance in the semiconductor market.
Reliance Steel is gaining from strong underlying demand in its major markets. The company witnessed strength in the semiconductors market in the third quarter and expects this trend to continue in the fourth quarter. It also saw 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.
Reliance Steel expects healthy demand trends to continue into the fourth quarter of 2022 notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
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 & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 51% in a year.
Commercial Metals currently carries a Zacks Rank #1. The 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 49% in a year.
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 80% in a year. The company currently carries a Zacks Rank #2.