New Forecasts: Here's What Analysts Think The Future Holds For Reliance Steel & Aluminum Co. (NYSE:RS)

By
Simply Wall St
Published
July 24, 2021
NYSE:RS
Source: Shutterstock

Shareholders in Reliance Steel & Aluminum Co. (NYSE:RS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Reliance Steel & Aluminum will make substantially more sales than they'd previously expected.

After the upgrade, the five analysts covering Reliance Steel & Aluminum are now predicting revenues of US$13b in 2021. If met, this would reflect a substantial 25% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$12b of revenue in 2021. It looks like there's been a clear increase in optimism around Reliance Steel & Aluminum, given the nice increase in revenue forecasts.

Check out our latest analysis for Reliance Steel & Aluminum

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NYSE:RS Earnings and Revenue Growth July 24th 2021

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Reliance Steel & Aluminum's growth to accelerate, with the forecast 57% annualised growth to the end of 2021 ranking favourably alongside historical growth of 2.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.3% per year. It seems obvious that as part of the brighter growth outlook, Reliance Steel & Aluminum is expected to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Reliance Steel & Aluminum this year. The analysts also expect revenues to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Reliance Steel & Aluminum.

Better yet, our automated discounted cash flow calculation (DCF) suggests Reliance Steel & Aluminum could be moderately undervalued. You can learn more about our valuation methodology on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.