Jefferies analyst Martin Englert downgraded Reliance Steel to Hold from Buy and lowered his price target for the shares to $100 from $105. Following the company's "solid" Q1 results, the analyst sees an "increasingly balanced" risk/reward at current valuation levels. He continues to like Reliance Steel's ' defensive profile plus optionality on future acquisitive-organic growth," but is cognizant of likely lower year-over-year volumes plus a seasonally weaker second half of the year, coupled with his view of gradual price-margin erosion.

Reliance expects a better than normal seasonal recovery in demand in the second quarter of 2024 despite prevailing macroeconomic uncertainty and geopolitical matters. Accordingly, the company estimates its tons sold will be up 2.5% to 4.5% in the second quarter of 2024 compared to the first quarter of 2024, with approximately 2% of the sequential growth coming from recently completed acquisitions on April 1, 2024. In addition, Reliance expects its average selling price per ton sold for the second quarter of 2024 to be down 1% to 3% compared to the first quarter of 2024. The company also anticipates short term gross profit margin pressure in the second quarter of 2024 as it works through higher cost inventory on hand. Based on these expectations, the company anticipates non-GAAP earnings per diluted share in the range of $4.70 to $4.90 for the second quarter of 2024.