KeyBanc analyst Philip Gibbs raised his price target for Reliance Steel to $109 from $107 and maintained an Overweight rating, telling investors that the company has strongly adapted and reinvented itself, driving outsized long-term returns and capturing a broader investor audience via aggressive growth CapEx, M&A, and shrewd capital allocation to drive ROIC to 10% from 6%-7%. He thinks Reliance should should continue to offer mid-cap basic material investors long-term rewards and multiple expansion potential.

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.