Earnings Miss: Reliance, Inc. Missed EPS By 5.5% And Analysts Are Revising Their Forecasts

Reliance, Inc. (NYSE:RS) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Reliance missed analyst forecasts, with revenues of US$3.6b and statutory earnings per share (EPS) of US$5.23, falling short by 2.9% and 5.5% respectively. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Reliance

Taking into account the latest results, the six analysts covering Reliance provided consensus estimates of US$14.1b revenue in 2024, which would reflect a noticeable 2.7% decline over the past 12 months. Statutory earnings per share are expected to dip 9.6% to US$19.77 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$14.2b and earnings per share (EPS) of US$19.96 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$355. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Reliance at US$380 per share, while the most bearish prices it at US$335. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Reliance is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Reliance's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.6% by the end of 2024. This indicates a significant reduction from annual 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 4.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Reliance 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Reliance's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$355, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Reliance. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Reliance going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Reliance (1 can't be ignored!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.