Reliance (RS) Valuation in Focus After Record Third-Quarter Results and U.S. Market Share Gains

Reliance (RS) reported its third-quarter earnings this week, delivering results above expectations and reaching a new high for volume sold. The company increased its U.S. market share even as the industry faced challenges.

See our latest analysis for Reliance.

Shares of Reliance have demonstrated resilience in a challenging environment, with the stock gaining 3.95% year-to-date and closing at $277.13 after outperforming in third-quarter results. While the 12-month total shareholder return is essentially flat, the longer-term view is impressive. Reliance delivered a 45.5% total return over three years and a standout 176.3% over five years, signaling sustained value creation as momentum builds around its expanding market share and strategic investments.

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With Reliance maintaining its momentum and surpassing expectations, the central question for investors is whether the recent gains signal ongoing upside at a bargain, or if the market has already factored in the company’s future growth potential.

Most Popular Narrative: 14.3% Undervalued

Reliance’s current share price of $277.13 sits well below the most-watched consensus fair value, signaling a notable gap between market price and underlying growth assumptions. This creates a compelling situation as investors weigh the company's resilient business model in light of analyst projections for the years ahead.

Continued investment in value-added processing capabilities and next-day delivery logistics has strengthened Reliance's market positioning, leading to outperformance versus the industry, increased customer stickiness, and the potential for sustained gross margin expansion as utilization improves.

Read the complete narrative.

Want to know if Reliance’s enduring margin strength can really support a premium price? The most-followed narrative’s surprising forecast is built on ambitious financial targets and future profit multiples rarely seen in its sector. See what’s fueling the analysts’ price call and the bold assumptions they’re banking on.

Result: Fair Value of $323.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent trade uncertainty and cost inflation could compress margins. This may challenge the bullish outlook for Reliance's ongoing earnings growth and valuation upside.

Find out about the key risks to this Reliance narrative.

Another View: Putting the Numbers in Perspective

A different lens is the price-to-earnings ratio, which currently sits at 19.9x for Reliance. That is noticeably lower than the US Metals and Mining industry average of 25.2x and also below the peer average of 34.1x. Looking to the fair ratio, analysis suggests the market could justify a price-to-earnings ratio of 20.7x for Reliance, which the current valuation is still under. This kind of gap can signal potential value, but does it mean the market is being too cautious or is there something missing in the bullish outlook?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Reliance for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Reliance Narrative

If you see the story differently or want to dig deeper, you can quickly draw your own conclusions and build a personal view in minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Reliance.

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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.

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