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Reliance Steel
(NYSE:RS)
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Rating:74Outperform
Price Target:
$457.00
▲(12.06% Upside)
Action:Reiterated
Date:07/25/26
The score is driven primarily by solid financial health (notably low leverage) and strong technical trend/momentum. The latest earnings call adds support through upbeat EPS guidance and strong operating metrics, but the overall rating is tempered by compressed TTM margins/cash conversion and a less attractive valuation (P/E 23.57 with a ~1.20% dividend yield).
Positive Factors
Conservative balance sheet / low leverage
Reliance’s low leverage and ample equity provide durable financial flexibility in a cyclical metals business. A conservative capital structure (debt-to-equity ~0.27, net debt/EBITDA ~0.9 reported) supports capital spending, working-capital funding, and optional shareholder actions without stressing solvency through downturns.
Negative Factors
Elevated LIFO expense and volatility
Large and rising LIFO charges create persistent reported earnings volatility and can materially depress GAAP margins in periods of metal price dislocation. Because aluminum is a disproportionate driver, recurring LIFO swings can obscure operating trends, complicate comparability and investor assessment over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet / low leverage
Reliance’s low leverage and ample equity provide durable financial flexibility in a cyclical metals business. A conservative capital structure (debt-to-equity ~0.27, net debt/EBITDA ~0.9 reported) supports capital spending, working-capital funding, and optional shareholder actions without stressing solvency through downturns.
Read all positive factors
Reliance Steel Key Performance Indicators (KPIs)
Any
Revenue by Metal
Breaks down sales by metal type (carbon steel, stainless, aluminum, specialty alloys), revealing whether revenue growth comes from rising prices or from shifts in product mix. Highlights exposure to volatile commodity prices and to key end markets like construction, energy, and manufacturing, and points to where Reliance Steel has pricing power or margin strength.
Breaks down sales by metal type (carbon steel, stainless, aluminum, specialty alloys), revealing whether revenue growth comes from rising prices or from shifts in product mix. Highlights exposure to volatile commodity prices and to key end markets like construction, energy, and manufacturing, and points to where Reliance Steel has pricing power or margin strength.
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The Fly
The FlyReliance Steel (RS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.47B
Dividend Yield1.21%
Average Volume (3M)393.20K
Price to Earnings (P/E)23.5
Beta (1Y)0.83
Revenue Growth15.44%
EPS Growth25.45%
CountryUS
Employees15,700
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)17.30
Shares Outstanding51,054,554
10 Day Avg. Volume368,199
30 Day Avg. Volume393,202
Financial Highlights & Ratios
PEG Ratio-1.98
Price to Book (P/B)2.12
Price to Sales (P/S)1.06
P/FCF Ratio30.21
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$404.00Price Target Upside-0.94% Downside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)23.05
Revenue Forecast (FY)$17.54B
Reliance Steel Business Overview & Revenue Model
Company Description
Reliance Steel & Aluminum Co. (RS) operates as a premier diversified metal solutions provider and a leading metal service center, serving clients across the United States, Canada, and globally. The company provides an extensive inventory of approx...
How the Company Makes Money
Reliance makes money primarily by purchasing metals from domestic and international mills and other suppliers, holding inventory across its service-center network, and reselling those products to customers at a markup. Revenue is generated from (1...
Reliance Steel Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Positive
The earnings call conveyed robust operational and financial momentum: record tons sold, strong pricing, meaningful revenue and profit growth, and confident guidance. Key challenges center on elevated LIFO expense (driven by aluminum and tariffs), some supply constraints and inflationary cost pressures. Management emphasized structural advantages—domestic mill relationships, scale, and a sizable border wall contract—that have driven outperformance and provide confidence for continued growth despite the noted headwinds.Positive Updates
Strong Revenue and Profit Growth
Second quarter sales increased 27% year-over-year. Non-GAAP pretax income rose 40% year-over-year to $429 million. Non-GAAP diluted EPS grew 42% year-over-year to $6.27, the highest EPS since Q2 2023.
Negative Updates
Elevated and Rising LIFO Expense
Full-year LIFO expense outlook increased to $300 million from $150 million. Q2 LIFO expense was $112.5 million (vs. prior estimate of $37.5 million) and equated to $1.64 per share, creating significant year-to-date LIFO volatility and compressing reported margins.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue and Profit Growth
Second quarter sales increased 27% year-over-year. Non-GAAP pretax income rose 40% year-over-year to $429 million. Non-GAAP diluted EPS grew 42% year-over-year to $6.27, the highest EPS since Q2 2023.
Read all positive updates
Company Guidance
Reliance guided Q3 2026 non‑GAAP diluted EPS of $6.40–$6.60 (up ~76%–81% YoY), which incorporates an estimated $75M of LIFO expense (~$1.10 per share); management raised its full‑year LIFO expense outlook to ~$300M (from $150M) after Q2 LIFO expense of $112.5M (~$1.64/share) and a LIFO reserve of ~ $700M. Management expects demand and pricing to remain healthy (subject to trade, U.S.–Iran conflict and normal seasonality); shipments excluding the U.S. border‑wall contract are modeled down ~2%–4% q/q for typical seasonality while the border‑wall work contributed ~5.1 percentage points of Q2 tons and is expected to add ~2% of volumes in Q3 (near a sustained run‑rate through mid‑2027), contributed ~$0.41/share in Q2, and was OpEx‑light (estimated ~40 bps gross‑margin headwind but ~30 bps pretax income accretion). Q2 operating metrics underlying the guide: sales +27% YoY, gross profit $1.3B (+11% q/q, +20% YoY), FIFO gross margin 30.5% (vs 30.1% Q1, 30.6% prior year), record tons sold (up 7% q/q, +10.8% YoY), non‑GAAP pretax income $429M (+40% YoY), non‑GAAP EPS $6.27 (+42% YoY), inventory turns ~5.2x (vs 4.8 in 2025; company target ~4.7), cash flow from ops ≈$162M, Q2 capex $93M with FY26 capex outlook ~ $300M (~half strategic), total debt $1.7B (net debt/EBITDA ~0.9), paid $64M dividends, and ~ $529M remaining share‑repurchase authorization.Reliance Steel Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
80
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.81B | 14.29B | 13.84B | 14.81B | 17.02B | 14.09B |
| Gross Profit | 4.25B | 3.83B | 3.84B | 4.30B | 5.01B | 4.26B |
| EBITDA | 1.52B | 1.30B | 1.45B | 2.03B | 2.73B | 2.26B |
| Net Income | 895.20M | 739.40M | 875.20M | 1.34B | 1.84B | 1.41B |
Balance Sheet | ||||||
| Total Assets | 11.17B | 10.37B | 10.02B | 10.48B | 10.33B | 9.54B |
| Cash, Cash Equivalents and Short-Term Investments | 235.40M | 216.60M | 318.10M | 1.08B | 1.17B | 300.50M |
| Total Debt | 2.00B | 1.99B | 1.42B | 1.38B | 1.87B | 1.87B |
| Total Liabilities | 3.75B | 3.19B | 2.79B | 2.75B | 3.23B | 3.44B |
| Stockholders Equity | 7.40B | 7.17B | 7.22B | 7.72B | 7.09B | 6.09B |
Cash Flow | ||||||
| Free Cash Flow | 539.50M | 502.50M | 999.20M | 1.20B | 1.78B | 562.80M |
| Operating Cash Flow | 851.50M | 831.40M | 1.43B | 1.67B | 2.12B | 799.40M |
| Investing Cash Flow | -309.80M | -321.80M | -803.70M | -483.90M | -348.50M | -652.30M |
| Financing Cash Flow | -544.40M | -620.20M | -1.38B | -1.28B | -892.60M | -528.90M |
Reliance Steel Technical Analysis
Positive
407.83
Price Trends
390.41
Positive
359.68
Positive
328.86
Positive
Market Momentum
2.71
Negative
63.91
Neutral
57.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RS, the sentiment is Positive. The current price of 407.83 is above the 20-day moving average (MA) of 391.88, above the 50-day MA of 390.41, and above the 200-day MA of 328.86, indicating a bullish trend. The MACD of 2.71 indicates Negative momentum. The RSI at 63.91 is Neutral, neither overbought nor oversold. The STOCH value of 57.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RS.
Reliance Steel Risk Analysis
Reliance Steel disclosed 25 risk factors in its most recent earnings report. Reliance Steel reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Reliance Steel Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $20.47B | 23.47 | 12.35% | 1.20% | 15.44% | 25.45% | |
73 Outperform | $58.54B | 20.50 | 13.53% | 0.90% | 17.19% | 126.69% | |
69 Neutral | $9.64B | 16.86 | 4.74% | 4.65% | -7.32% | ― | |
64 Neutral | $51.14B | 22.51 | 5.35% | 0.86% | 3.25% | -27.63% | |
64 Neutral | $36.19B | 22.70 | 17.60% | 0.83% | 19.77% | 60.80% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
41 Neutral | $15.40B | 18.02 | 1.48% | 3.10% | -5.70% | -6.30% |
* Basic Materials Sector Average
RS
Reliance Steel
406.10
127.20
45.61%
MT
ArcelorMittal
70.14
39.49
128.86%
NUE
Nucor
257.29
120.45
88.03%
PKX
POSCO
53.17
1.23
2.37%
STLD
Steel Dynamics
251.26
130.34
107.79%
TX
Ternium SA
49.24
18.97
62.68%
Reliance Steel Corporate Events
Executive/Board ChangesShareholder Meetings
Reliance Steel Shareholders Back Board, Pay and Auditor
Positive
May 21, 2026
At its Annual Meeting of Stockholders held on May 20, 2026, Reliance, Inc. shareholders re-elected all nominees to the board of directors, ensuring continuity in the company’s leadership and governance structure. Investors also approved, on ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.