UPDATE: Bank of America Downgrades Reliance Steel & Aluminum to Neutral, Reiterates $75 PT on Near-Term Headwinds, Valuation

In a report published Wednesday, Bank of America analyst Timna Tanners downgraded the rating on

from Buy to Neutral, but reiterated the $75.00 price target. In the report, Bank of America noted, “We downgrade shares of metal distributor Reliance despite an attractive business model with steady gross margins and countercyclical cash flows. Earnings stability has supported multiple expansion to a recent 7.5x vs a historical 6-6.5x, and deservedly helped shrs outperform mills. Yet we think consensus forecasts now factor in a lot of good news, fueled by mgmt detailing ‘normalized' earnings potential calculated from recent acquisitions off a strong 2007 base year. This limits positive surprise potential, we think, albeit we like the cash generation story.” Reliance Steel & Aluminum closed on Tuesday at $74.15.