RS Stock Analysis — Reliance Steel & Aluminum Co.
Sector: Industrials
AI Verdict
RS is cheap for the growth you're getting if it delivers on the 67.5% EPS jump, and its distribution moat makes that forecast more credible than most industrials.
Competitive Moat
Reliance Steel & Aluminum operates as a metals service center, providing value-added processing and just-in-time delivery to manufacturers, which creates sticky customer relationships and high switching costs. Its vast distribution network and inventory management expertise help buffer against commodity price swings and smaller competitors.
Summary
A huge jump in expected earnings (+67.5% forward EPS growth) is driving a sharp drop in forward P/E to 17.6x.
Where It Stands
RS trades at 17.6x next year's earnings, a discount to the 20x industrials median, while analysts expect 67.5% EPS growth and the trailing PEG is just 0.43.
Key Metrics
- Trailing P/E: 29.4x
- Forward P/E: 17.6x
- PEG Ratio: 0.43
- Earnings Growth: +0.7%
- Revenue Growth: +0.2%
- Dividend Yield: 0.01%
- 52-Week High: $433.02
- 52-Week Low: $260.31
Analyst Consensus
9 Buy · 8 Hold · 1 Sell (18 analysts)
Bull Case
You're paying 17.6x forward earnings for a company expected to grow EPS by 67.5% next year, which is cheap for the growth on offer.
Bear Case
If the forward P/E reverts to the sector median of 20x but earnings disappoint, the stock could see a sharp rerating downward from its current 29.4x trailing P/E.
Catalyst to Watch
Watch for quarterly earnings surprises or guidance changes that could confirm or undercut the 67.5% EPS growth forecast.