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Worthington Steel, Inc.
(NYSE:WS)
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Rating:49Neutral
Price Target:
$33.00
▲(8.73% Upside)
Action:Reiterated
Date:07/01/26
Overall score reflects pressured financial quality (earnings compression and reduced equity cushion) and weak technical trend (price below all key moving averages). Valuation is also unfavorable with a very high P/E relative to current profitability. Offsetting these, management outlined credible post-acquisition synergy and working-capital goals and continued dividends, but near-term volatility and integration execution risk remain significant.
Positive Factors
Scale & Diversification
The Klöckner majority acquisition materially broadens product lines (aluminum, stainless, plate, fabrication) and geographic reach, creating structural end-market diversification. Targeted $150M EBITDA and $150M working-capital opportunities make scale-driven margin and cash improvements a durable strategic lever if integration executes.
Negative Factors
Weakened Equity Cushion
A sharp decline in reported equity materially reduces the company's capital cushion versus prior periods and increases vulnerability to earnings shocks. Even with moderate leverage metrics, the reduced equity base raises solvency and covenant sensitivity during cyclical revenue or margin contractions and integration costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & Diversification
The Klöckner majority acquisition materially broadens product lines (aluminum, stainless, plate, fabrication) and geographic reach, creating structural end-market diversification. Targeted $150M EBITDA and $150M working-capital opportunities make scale-driven margin and cash improvements a durable strategic lever if integration executes.
Read all positive factors
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.
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The FlyWorthington Steel, Inc. (WS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.63B
Dividend Yield1.78%
Average Volume (3M)250.43K
Price to Earnings (P/E)95.2
Beta (1Y)1.74
Revenue Growth11.33%
EPS Growth-84.72%
CountryUS
Employees5,000
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.35
Shares Outstanding50,806,340
10 Day Avg. Volume333,187
30 Day Avg. Volume250,427
Financial Highlights & Ratios
PEG Ratio-1.44
Price to Book (P/B)1.98
Price to Sales (P/S)0.62
P/FCF Ratio26.56
Enterprise Value/Market Cap1.39
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit5.60
Enterprise Value/Ebitda10.18
Forecast
1Y Price Target
$46.00Price Target Upside51.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.5
Revenue Forecast (FY)$3.84B
Worthington Steel, Inc. Business Overview & Revenue Model
Company Description
Worthington Steel, Inc. functions as a specialized steel processing enterprise serving the North American market. The company supplies a variety of steel products, notably flat-rolled carbon steel, custom-welded blanks (both steel and aluminum var...
How the Company Makes Money
WS primarily makes money by (1) purchasing flat-rolled steel (typically coil) from steel producers and (2) earning revenue from selling processed steel products and services to customers at a price that reflects the input steel cost plus a value-a...
Worthington Steel, Inc. Earnings Call Summary
Earnings Call Date:Jun 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Sep 30, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: materially positive strategic progress (completion of the Klöckner acquisition, clear synergy targets, expanded product mix and scale, operational improvements, AI deployments, and several end-market share gains) alongside near-term financial pressures (a large $94.5M electrical steel impairment, a reported net loss for the quarter, lower adjusted EBIT and EPS, declines in toll volumes and some end markets, and transaction-related costs). Management emphasized cash generation, liquidity, and a disciplined integration plan, but acknowledged volatility and integration execution risk.Positive Updates
Completion of Klöckner Acquisition and Strategic Scale Expansion
Completed purchase of a majority (~62%) interest in Klöckner on June 3; largest acquisition in company history. Expands product mix (aluminum, stainless, long products, plate, fabrication), geographic footprint, and end-market diversification. Raised more than $1.0 billion of new capital to support the transaction. Management targets $150 million of run-rate EBITDA synergies plus an additional ~$150 million of working capital opportunities, with roughly a 50/50 split between year one and year two, and a plan to cut debt roughly in half in the same period.
Negative Updates
Significant Non-Cash Impairment in Electrical Steel
Recorded a $94.5 million pre-tax non-cash impairment in the electrical steel reporting unit (equivalent to $1.31 per share), including goodwill and long-lived asset impairments. Management cited softer European activity, increased foreign competition in the U.S., and a temporary slowdown in industrial motor demand as drivers.
Read all updates
Q4-2026 Updates
Positive
Negative
Completion of Klöckner Acquisition and Strategic Scale Expansion
Completed purchase of a majority (~62%) interest in Klöckner on June 3; largest acquisition in company history. Expands product mix (aluminum, stainless, long products, plate, fabrication), geographic footprint, and end-market diversification. Raised more than $1.0 billion of new capital to support the transaction. Management targets $150 million of run-rate EBITDA synergies plus an additional ~$150 million of working capital opportunities, with roughly a 50/50 split between year one and year two, and a plan to cut debt roughly in half in the same period.
Read all positive updates
Company Guidance
The company’s guidance and near-term priorities center on integrating Klöckner and delivering quantified synergies and cash benefits: $150 million of run-rate EBITDA synergies plus roughly $150 million of working capital opportunity (split roughly 50/50 across year one and year two) with a goal to cut debt in half in the same period; Worthington now owns ~62% of Klöckner and raised more than $1 billion of new capital. For fiscal 2027 the company expects legacy Worthington Steel capital expenditures of about $60 million, announced a quarterly dividend of $0.16 per share payable Sept. 29, 2026, and estimated Q1 FY2027 pre-tax inventory holding gains of $10–$15 million. Recent operating/financial metrics referenced to frame the guidance include Q4 net sales of $929.2 million, adjusted EBITDA $75.2 million, adjusted EBIT $54 million, adjusted EPS $0.74, reported net loss attributable to controlling interest of $48.7 million (‑$0.98 per share) including a $94.5 million pre-tax electrical steel impairment; shipments of ~939,000 tons (down 44,000 tons, ‑4% YoY) with direct sales 65% of mix (up from 60%) and direct volume +3% (auto +5%, energy +24%, agriculture +11%, construction ‑14%, heavy truck ‑14%, toll volumes ‑15%); quarterly cash from operations $45 million, free cash flow $8 million (trailing 12‑month FCF $80 million), Q4 capex $37.1 million, and cash of $85 million with net debt of $172 million prior to the Klöckner settlement; combined results for the enlarged company are expected to be reported next quarter.Worthington Steel, Inc. Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
46
Neutral
Cash Flow
62
Positive
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.44B | 3.09B | 3.43B | 3.61B | 4.07B |
| Gross Profit | 402.60M | 388.60M | 439.80M | 336.50M | 395.50M |
| EBITDA | 189.90M | 221.20M | 287.50M | 201.30M | 316.80M |
| Net Income | 17.30M | 110.70M | 154.70M | 87.10M | 180.40M |
Balance Sheet | |||||
| Total Assets | 2.27B | 1.96B | 1.87B | 1.76B | 2.08B |
| Cash, Cash Equivalents and Short-Term Investments | 84.60M | 38.00M | 40.20M | 32.70M | 20.05M |
| Total Debt | 354.40M | 227.90M | 223.90M | 80.40M | 153.90M |
| Total Liabilities | 990.20M | 763.90M | 748.90M | 609.80M | 817.66M |
| Stockholders Equity | 1.07B | 1.07B | 985.30M | 1.03B | 1.13B |
Cash Flow | |||||
| Free Cash Flow | 80.00M | 99.90M | 96.10M | 269.54M | 3.05M |
| Operating Cash Flow | 201.20M | 230.30M | 199.50M | 315.01M | 39.49M |
| Investing Cash Flow | -219.40M | -129.10M | -132.00M | -22.15M | -395.35M |
| Financing Cash Flow | 9.00M | -48.50M | -60.00M | -280.23M | 358.45M |
Worthington Steel, Inc. Technical Analysis
Negative
30.35
Price Trends
38.98
Negative
37.27
Negative
36.03
Negative
Market Momentum
-2.21
Positive
36.23
Neutral
16.67
Positive
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 36.95, below the 50-day MA of 38.98, and below the 200-day MA of 36.03, indicating a bearish trend. The MACD of -2.21 indicates Positive momentum. The RSI at 36.23 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, 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 |
|---|---|---|---|---|---|---|---|
62 Neutral | $8.17B | 30.87 | 2.53% | 2.92% | 4.46% | -47.34% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $4.90B | 7.86 | 4.48% | ― | -5.87% | -81.34% | |
50 Neutral | $137.83M | 152.80 | 1.40% | ― | -51.72% | ― | |
49 Neutral | $1.63B | 95.17 | 10.97% | 1.78% | 11.33% | -84.72% | |
41 Neutral | $1.24B | -3.84 | -12.83% | ― | 2.16% | 20.46% |
* Basic Materials Sector Average
WS
Worthington Steel, Inc.
33.05
0.78
2.41%
GGB
Gerdau SA
4.50
1.61
55.71%
SIM
Grupo Simec SA De CV
31.40
2.66
9.28%
SID
Companhia Siderúrgica Nacional
1.01
-0.51
-33.55%
ACNT
Ascent Industries
15.26
2.39
18.57%
Worthington Steel, Inc. Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Worthington Steel Secures New $550 Million Credit Facility
Positive
Jun 30, 2026
On June 25, 2026, Worthington Steel, Inc. entered into a new asset-based revolving credit agreement with a syndicate of lenders led by Wells Fargo Bank that replaces its prior revolving facility. The new ABL facility provides up to $550 million in...
Business Operations and StrategyExecutive/Board ChangesDividendsFinancial DisclosuresM&A Transactions
Worthington Steel Reports Loss Amid Kloeckner Integration Progress
Negative
Jun 25, 2026
On June 23, 2026, Worthington Steel announced the retirement of Corporate Controller and Principal Accounting Officer Steven R. Witt, effective the same day, and the appointment of Gwen Joseph, formerly Director of External Reporting, to succeed h...
Business Operations and StrategyDelistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Worthington Steel Advances Kloeckner Acquisition with Delisting Plan
Positive
Jun 3, 2026
On April 14, 2026, Worthington Steel secured a majority stake in Kloeckner Co SE via a voluntary public takeover offer, and by June 3, 2026 it held about 61–62% of Kloeckner’s outstanding shares after settling tenders at €11 per...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Worthington Steel Secures Financing for Kloeckner Acquisition
Positive
Jun 2, 2026
On June 1, 2026, Worthington Steel, Inc. issued $700 million of 7.750% senior secured notes due 2033 and closed a parallel $700 million seven-year senior secured term loan B facility, both secured by substantially all of the company’s and ce...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Worthington Steel Cleared to Complete Klöckner Acquisition Deal
Positive
May 27, 2026
On May 27, 2026, Worthington Steel said Germany’s Federal Cartel Office cleared its planned acquisition of Klöckner, removing the final regulatory hurdle for the deal. With all offer conditions now satisfied, the company and its BidCo v...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Worthington Steel Launches $900 Million Notes for Acquisition
Neutral
May 26, 2026
On May 26, 2026, Worthington Steel announced that its wholly owned subsidiary WS Escrow LLC launched a private offering of $900 million in senior secured notes due 2033, targeted exclusively at qualified institutional buyers and certain non-U.S. i...
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.