Worthington Steel, Inc. (WS)
NYSE:WS
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Worthington Steel, Inc.
(NYSE:WS)
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Rating:50Neutral
Price Target:
$30.00
▼(-1.15% Downside)
Action:ReiteratedDate:04/01/26
WS scores in the middle primarily due to mixed fundamentals (cyclical, lower-margin earnings profile and balance-sheet data uncertainty) and weak technical momentum (broadly below key moving averages). The earnings call provides some offset through improving mix, automotive share gains, and ongoing free cash flow, but valuation remains a headwind with a high P/E relative to cyclical risk.
Positive Factors
Sustained cash generation
Consistent positive operating and free cash flow strengthens long-term financial flexibility. Reliable cash generation funds dividends, $110–$115M annual capex and strategic M&A without immediate equity raises, underwriting growth investments and giving the company resilience through steel-cycle volatility.
Negative Factors
Below-cycle margins
Profitability remains meaningfully below prior-cycle peaks, limiting cushion against raw-material or demand shocks. Persistently lower gross and net margins constrain reinvestment capacity and make earnings more vulnerable to spread compression, reducing durable earnings power until structural margin improvement occurs.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained cash generation
Consistent positive operating and free cash flow strengthens long-term financial flexibility. Reliable cash generation funds dividends, $110–$115M annual capex and strategic M&A without immediate equity raises, underwriting growth investments and giving the company resilience through steel-cycle volatility.
Read all positive factors
Worthington Steel, Inc. (WS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.53B
Dividend Yield1.78%
Average Volume (3M)356.88K
Price to Earnings (P/E)49.8
Beta (1Y)1.69
Revenue Growth-0.75%
EPS Growth-13.51%
CountryUS
Employees5,000
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.27
Shares Outstanding50,805,634
10 Day Avg. Volume537,452
30 Day Avg. Volume356,877
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)1.15
Price to Sales (P/S)0.40
P/FCF Ratio12.34
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.55
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda8.46
Forecast
1Y Price Target
$38.00Price Target Upside25.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.46
Revenue Forecast (FY)$3.64B
Worthington Steel, Inc. Business Overview & Revenue Model
Company Description
Worthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets...
How the Company Makes Money
WS primarily makes money by buying flat-rolled steel from steel producers and reselling it to customers after performing processing and logistics services. Key revenue streams include: (1) sales of processed flat-rolled steel (e.g., slit coil, bla...
Worthington Steel, Inc. Key Performance Indicators (KPIs)
Any
Net Sales by End Market
Breaks revenue down by customer sectors—such as construction, energy, automotive, and manufacturing—to show where demand is coming from and where exposure lies. A diversified mix reduces reliance on any single cyclical market; heavy concentration in one end market raises risk if that sector slows or faces pricing pressure.
Breaks revenue down by customer sectors—such as construction, energy, automotive, and manufacturing—to show where demand is coming from and where exposure lies. A diversified mix reduces reliance on any single cyclical market; heavy concentration in one end market raises risk if that sector slows or faces pricing pressure.
Data provided by:
The Fly
The FlyWorthington Steel, Inc. Earnings Call Summary
Earnings Call Date:Mar 25, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 01, 2026
Earnings Call Sentiment Neutral
The call conveyed a balanced picture: tangible strategic progress (Kloeckner acquisition advancing, clear automotive share gains, meaningful transformation and free cash flow generation) and several operational positives (direct sales mix shift, electrical steel progress). Offsetting these were near-term operational and regional headwinds (7% shipment decline, 22% toll-processing drop, Europe/CEDIM underperformance), acquisition-related expenses, OEM timing delays, and working-capital pressure from volatile steel prices. Management’s tone was cautiously optimistic about market recovery in the back half of the year but pragmatic about current softness.Positive Updates
Kloeckner acquisition progressing
Proposed acquisition of Kloeckner proceeding via voluntary tender offer; initial acceptance period closing with confidence in meeting 57.5% threshold, regulatory approvals beginning to arrive, transaction expected to close in H2 calendar 2026. Management reporting strong cultural fit and positive external response from customers, suppliers and investors.
Negative Updates
Adjusted profitability and EPS contraction
Adjusted EBIT fell to $20.0 million in Q3, down $5.3 million from $25.3 million year over year. Adjusted EPS declined to $0.27 from $0.35 in the prior-year quarter. GAAP earnings were $10.4 million, or $0.20 per share, versus $13.8 million, or $0.27 per share, prior-year.
Read all updates
Q3-2026 Updates
Positive
Negative
Kloeckner acquisition progressing
Proposed acquisition of Kloeckner proceeding via voluntary tender offer; initial acceptance period closing with confidence in meeting 57.5% threshold, regulatory approvals beginning to arrive, transaction expected to close in H2 calendar 2026. Management reporting strong cultural fit and positive external response from customers, suppliers and investors.
Read all positive updates
Company Guidance
Management guided to cautious optimism for the back half of calendar‑year 2026, expecting the Kloeckner tender to clear the 57.5% threshold and close in H2 CY2026 (Worthington has bought ~8% of Kloeckner shares for ~$101M using a $126M ABL), warned of near‑term steel price volatility with hot‑rolled coil near $975/ton and estimated FY2026 pretax inventory holding gains of $15–$20M, and forecast upward working‑capital pressure in Q4; they reiterated market recoveries (automotive strength—direct shipments to the Detroit Three up ~13% and direct automotive shipments +10% YoY—expecting broader auto, heavy‑truck/trailer and construction pick‑ups later in the year, and agriculture to begin a slow rebound late CY2026). Financial and capital guidance included Q3 operating cash flow $63.0M and free cash flow $33.0M (TTM FCF $81.0M), Q3 CapEx $30.0M with FY2026 CapEx expected $110–$115M, ending cash $90.0M and net debt $161.0M, and a quarterly dividend of $0.16/share payable June 26, 2026. Operational timing highlights: Canada electrical‑steel site >60% of added capacity sold and equipment moved over the next few months, Mexico traction‑motor lamination begins shipping this quarter with full production expected by fiscal 2029 at ~75% capacity on current contracts.Worthington Steel, Inc. Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
45
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | May 2025 | May 2024 | May 2023 | May 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.35B | 3.09B | 3.43B | 3.61B | 4.07B | 2.13B |
| Gross Profit | 411.50M | 388.60M | 439.80M | 336.50M | 395.50M | 370.84M |
| EBITDA | 216.90M | 221.20M | 287.50M | 201.30M | 316.80M | 268.36M |
| Net Income | 121.20M | 110.70M | 154.70M | 87.10M | 180.40M | 171.01M |
Balance Sheet | ||||||
| Total Assets | 2.32B | 1.96B | 1.87B | 1.76B | 2.08B | 1.37B |
| Cash, Cash Equivalents and Short-Term Investments | 90.00M | 38.00M | 40.20M | 32.70M | 20.05M | 17.46M |
| Total Debt | 352.60M | 227.90M | 223.90M | 80.40M | 153.90M | 8.11M |
| Total Liabilities | 958.10M | 763.90M | 748.90M | 609.80M | 817.66M | 551.82M |
| Stockholders Equity | 1.12B | 1.07B | 985.30M | 1.03B | 1.13B | 661.33M |
Cash Flow | ||||||
| Free Cash Flow | 164.70M | 99.90M | 96.10M | 269.54M | 3.05M | 123.75M |
| Operating Cash Flow | 210.20M | 230.30M | 199.50M | 315.01M | 39.49M | 152.55M |
| Investing Cash Flow | -225.50M | -129.10M | -132.00M | -22.15M | -395.35M | -27.69M |
| Financing Cash Flow | 42.10M | -48.50M | -60.00M | -280.23M | 358.45M | -116.68M |
Worthington Steel, Inc. Technical Analysis
Negative
30.35
Price Trends
38.50
Negative
36.71
Negative
33.83
Negative
Market Momentum
-2.37
Negative
36.97
Neutral
40.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WS, the sentiment is Negative. The current price of 30.35 is below the 20-day moving average (MA) of 32.05, below the 50-day MA of 38.50, and below the 200-day MA of 33.83, indicating a bearish trend. The MACD of -2.37 indicates Negative momentum. The RSI at 36.97 is Neutral, neither overbought nor oversold. The STOCH value of 40.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WS.
Worthington Steel, Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $5.09B | 61.64 | 6.07% | ― | -16.81% | -67.68% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $7.30B | 29.29 | 2.53% | 2.92% | -2.53% | -36.08% | |
50 Neutral | $1.53B | 49.75 | 10.97% | 1.78% | -0.75% | -13.51% | |
48 Neutral | $125.57M | -27.96 | -6.29% | ― | -29.03% | ― | |
45 Neutral | $1.64B | -5.92 | -13.62% | ― | -5.79% | -5.30% |
* Basic Materials Sector Average
WS
Worthington Steel, Inc.
30.17
8.05
36.37%
GGB
Gerdau SA
3.76
1.53
68.69%
SIM
Grupo Simec SA De CV
29.30
3.34
12.87%
SID
Companhia Siderúrgica Nacional
1.26
-0.05
-3.82%
ACNT
Ascent Industries
13.26
0.65
5.15%
Worthington Steel, Inc. Corporate Events
Business Operations and StrategyDelistings and Listing ChangesM&A Transactions
Worthington Steel Secures Majority Stake in Klöckner & Co
Positive
Mar 31, 2026
On March 31, 2026, Worthington Steel reported that its voluntary public cash takeover offer for German steel and metal processor Klöckner Co SE cleared the 57.5% minimum acceptance threshold, securing about 58.8% of Klöckner’s sha...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Worthington Steel Posts Q3 Results, Pursues Kloeckner Acquisition
Negative
Mar 26, 2026
On March 25, 2026, Worthington Steel reported fiscal third‑quarter 2026 results for the period ended February 28, 2026, showing net sales up 12% year over year to $769.8 million, driven by higher direct volumes and selling prices, but operat...
Business Operations and StrategyM&A Transactions
Worthington Steel Lowers Threshold in Klöckner Takeover Bid
Positive
Mar 10, 2026
On March 10, 2026, Worthington Steel’s German subsidiary amended its voluntary all-cash takeover offer for Germany’s Klöckner Co SE by lowering the minimum acceptance threshold from 65% to 57.5% of outstanding shares, while keepi...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Worthington Steel to Acquire Kloeckner in Major Deal
Positive
Jan 22, 2026
On January 15, 2026, Worthington Steel agreed a Business Combination Agreement to acquire German-listed Kloeckner Co via an all-cash voluntary public takeover offer at €11 per share, backed by Kloeckner’s largest shareholder SWOCTEM G...
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.