Recent Posts

Steel: Adjusting Ratings, Raising Price Targets and Revising Estimates Following Strong Survey Results

We rearranged the steel coverage group investment ratings to account for recent trading strength, the divergence between the closing prices and price targets, and higher earnings outlook(s). Today’s actions were triggered by the better-than-expected carbon steel survey results and review of future market drivers. Among the major changes, we upgraded Nucor (NUE) after considering the new earnings outlook and the rising potential for a stimulus trading boost. At the same time, we lowered STLD and RS to OUTPERFORM (versus Strong Buy) following the recent surge in trading. While still positive on these two names, we would be less aggressive. Finally, we referred to the surprising level of bullishness building throughout the channel and strong survey data points. The most interesting takeaway involved steel contacts raising their year-end HRC price forecast by $100-125/ton. Continue reading

Read More »
6:04 PM

Reliance Steel & Alum (RS): One Of The Names That Could Really Surprise To The Upside Next Week

We like the set-up for Reliance Steel & Aluminum Co (RS) heading into next week’s earnings report and reiterate our OUTPERFORM recommendation on the shares. After reviewing all key portfolio drivers, we see very high probability of a 3Q20 earnings beat (and favorable guidance) primarily driven by ferrous and nonferrous metals pricing strength, healthy shipment levels, a tolling recovery, and improved cost position. Continue reading

Read More »
6:23 AM

Reliance Steel & Alum (RS): Initiating Coverage With An OUTPERFORM Rating

We are starting formal coverage on Reliance Steel & Aluminum (RS) with an OUTPERFORM recommendation and twelve-month target price of $101/share (suggesting roughly 9% upside versus Wednesday’s closing price). Against the backdrop of relatively cautious near-term expectations for the carbon steel group, driven by weak survey results and falling prices, we believe RS is positioned to meet or beat consensus expectations for CY20 on market share improvements, cost reduction efforts and early upward momentum for nonferrous metals. Continue reading

Read More »
9:00 AM
View All Reports