Reliance Steel & Aluminum Co. (NYSE:RS) Full-Year Results Just Came Out: Here's What Analysts Are Forecasting For This Year
Investors in Reliance Steel & Aluminum Co. (NYSE:RS) had a good week, as its shares rose 9.0% to close at US$326 following the release of its annual results. The result was positive overall - although revenues of US$15b were in line with what the analysts predicted, Reliance Steel & Aluminum surprised by delivering a statutory profit of US$22.64 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Reliance Steel & Aluminum after the latest results.
Check out our latest analysis for Reliance Steel & Aluminum
Taking into account the latest results, the current consensus, from the six analysts covering Reliance Steel & Aluminum, is for revenues of US$14.3b in 2024. This implies a noticeable 3.4% reduction in Reliance Steel & Aluminum's revenue over the past 12 months. Statutory earnings per share are forecast to decline 19% to US$18.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$14.0b and earnings per share (EPS) of US$18.72 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.
Even though revenue forecasts increased, there was no change to the consensus price target of US$306, suggesting the analysts are focused on earnings as the driver of value creation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Reliance Steel & Aluminum, with the most bullish analyst valuing it at US$362 and the most bearish at US$280 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Reliance Steel & Aluminum is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 3.4% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Reliance Steel & Aluminum is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Reliance Steel & Aluminum going out to 2026, and you can see them free on our platform here.
Even so, be aware that Reliance Steel & Aluminum is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
