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Reliance Steel (RS) Up 23% YTD: What's Driving the Stock?
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Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have gained 23.4% year to date. The company has also outperformed its industry’s decline of 13.5% over the same time frame. Moreover, it has topped the S&P 500’s 19.9% decline over the same period.
Let’s dive into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Driving RS?
Reliance Steel is gaining from strong underlying demand in its major markets. The company witnessed strength in the semiconductors market in the third quarter of 2022 and expects this trend to continue in the fourth quarter. It also saw sequentially higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace recovered during the third quarter and the company is cautiously optimistic that demand will continue to improve in the fourth quarter. It also expects demand in the energy (oil and natural gas) market to modestly improve in the fourth quarter.
The company’s top line, in the third quarter of 2022, was driven by healthy demand in many of its end markets and strong operational execution. It benefited from the recovery in aerospace and energy and continued strong performance in the semiconductor market.
Reliance Steel expects healthy demand trends to continue into the fourth quarter of 2022 notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Earnings estimates for Reliance Steel have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for RS for 2022 has increased around 3.1%. The consensus estimate for fourth-quarter 2022 has also been revised roughly 9.3% upward over the same time frame.
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 43% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 39% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 71% in a year. The company currently carries a Zacks Rank #1.
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Reliance Steel (RS) Up 23% YTD: What's Driving the Stock?
Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have gained 23.4% year to date. The company has also outperformed its industry’s decline of 13.5% over the same time frame. Moreover, it has topped the S&P 500’s 19.9% decline over the same period.
Let’s dive into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Driving RS?
Reliance Steel is gaining from strong underlying demand in its major markets. The company witnessed strength in the semiconductors market in the third quarter of 2022 and expects this trend to continue in the fourth quarter. It also saw sequentially higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace recovered during the third quarter and the company is cautiously optimistic that demand will continue to improve in the fourth quarter. It also expects demand in the energy (oil and natural gas) market to modestly improve in the fourth quarter.
The company’s top line, in the third quarter of 2022, was driven by healthy demand in many of its end markets and strong operational execution. It benefited from the recovery in aerospace and energy and continued strong performance in the semiconductor market.
Reliance Steel expects healthy demand trends to continue into the fourth quarter of 2022 notwithstanding the current macroeconomic uncertainty, inflation, ongoing supply-chain disruptions and geopolitical factors.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Earnings estimates for Reliance Steel have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for RS for 2022 has increased around 3.1%. The consensus estimate for fourth-quarter 2022 has also been revised roughly 9.3% upward over the same time frame.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 43% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 39% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 71% in a year. The company currently carries a Zacks Rank #1.