We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reliance (RS) Up 21% in 3 Months: What's Driving the Rally?
Read MoreHide Full Article
Reliance, Inc.’s (RS - Free Report) shares have gained 20.9% over the past three months. The company has also outperformed its industry’s rise of 15.2% over the same time frame. It has also topped the S&P 500’s roughly 11.6% 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 Aiding RS?
Forecast-topping earnings performance in the fourth quarter of 2023 and upbeat prospects have contributed to the gain in the company's shares. Reliance's adjusted earnings of $4.73 per share for the quarter topped the Zacks Consensus Estimate of $3.86.
Reliance reported a 4.9% year-over-year increase in shipments (thousand tons sold) to 1,354.2 in the fourth quarter, driven by robust performance in non-residential construction, aerospace and general manufacturing.
Non-residential construction, Reliance's primary market, saw a notable improvement in 2023, with optimism for continued growth in the first quarter of 2024. Commercial aerospace demand remained strong, supported by defense appropriations. Toll processing services for the automotive sector witnessed growth, with expectations for further improvement. Overall manufacturing demand improved modestly, driven by organic growth investments.
Although the semiconductor market declined due to inventory issues, stability was observed in the fourth quarter. Reliance remains optimistic about long-term prospects, buoyed by the CHIPS Act and investments in capacity expansion in the United States.
Reliance anticipates continued healthy demand trends in the first quarter of 2024 despite ongoing macroeconomic uncertainties and geopolitical issues. The company projects a 9-11% increase in tons sold compared to the fourth quarter of 2023, in line with typical seasonal patterns. Reliance expects the average selling price per ton sold to rise 1-3% compared with the previous quarter’s levels, driven by stabilized pricing trends across many product lines.
Moreover, RS has been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. The acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses. The acquisition of Southern Steel Supply also expands the company’s reach in the Southern United States and boosts its value-added processing services. The buyout of Cooksey Iron & Metal Co also boosts Reliance's presence in the fast-growing Southeastern market. Moreover, the acquisition of American Alloy will expand Reliance's product portfolio with specialty carbon steel plates as well as new production capabilities.
Earnings estimates for Reliance have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for RS for 2024 has increased around 1.9%. The consensus estimate for first-quarter 2024 has also been revised roughly 7.6% upward over the same time frame.
Other top-ranked stocks worth a look in the basic materials space include, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 33% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 164% in a year.
The consensus estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 69% in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Reliance (RS) Up 21% in 3 Months: What's Driving the Rally?
Reliance, Inc.’s (RS - Free Report) shares have gained 20.9% over the past three months. The company has also outperformed its industry’s rise of 15.2% over the same time frame. It has also topped the S&P 500’s roughly 11.6% 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 Aiding RS?
Forecast-topping earnings performance in the fourth quarter of 2023 and upbeat prospects have contributed to the gain in the company's shares. Reliance's adjusted earnings of $4.73 per share for the quarter topped the Zacks Consensus Estimate of $3.86.
Reliance reported a 4.9% year-over-year increase in shipments (thousand tons sold) to 1,354.2 in the fourth quarter, driven by robust performance in non-residential construction, aerospace and general manufacturing.
Non-residential construction, Reliance's primary market, saw a notable improvement in 2023, with optimism for continued growth in the first quarter of 2024. Commercial aerospace demand remained strong, supported by defense appropriations. Toll processing services for the automotive sector witnessed growth, with expectations for further improvement. Overall manufacturing demand improved modestly, driven by organic growth investments.
Although the semiconductor market declined due to inventory issues, stability was observed in the fourth quarter. Reliance remains optimistic about long-term prospects, buoyed by the CHIPS Act and investments in capacity expansion in the United States.
Reliance anticipates continued healthy demand trends in the first quarter of 2024 despite ongoing macroeconomic uncertainties and geopolitical issues. The company projects a 9-11% increase in tons sold compared to the fourth quarter of 2023, in line with typical seasonal patterns. Reliance expects the average selling price per ton sold to rise 1-3% compared with the previous quarter’s levels, driven by stabilized pricing trends across many product lines.
Moreover, RS has been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. The acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses. The acquisition of Southern Steel Supply also expands the company’s reach in the Southern United States and boosts its value-added processing services. The buyout of Cooksey Iron & Metal Co also boosts Reliance's presence in the fast-growing Southeastern market. Moreover, the acquisition of American Alloy will expand Reliance's product portfolio with specialty carbon steel plates as well as new production capabilities.
Earnings estimates for Reliance have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for RS for 2024 has increased around 1.9%. The consensus estimate for first-quarter 2024 has also been revised roughly 7.6% upward over the same time frame.
Reliance Inc. Price and Consensus
Reliance Inc. price-consensus-chart | Reliance Inc. Quote
Stocks to Consider
Other top-ranked stocks worth a look in the basic materials space include, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 33% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 164% in a year.
The consensus estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 69% in the past year.