Market Overview

UPDATE: Bank of America Downgrades Reliance Steel & Aluminum on Near-Term Headwinds, Valuation

Share:
Related RS
Jefferies Staying Defensive On Steel Sector, Highlights Expectation For A Weak End To The Year
Benzinga's Top Upgrades

In a report published Wednesday, Bank of America analyst Timna Tanners downgraded the rating on Reliance Steel & Aluminum (NYSE: RS) 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.

Latest Ratings for RS

DateFirmActionFromTo
Jul 2016Bank of AmericaUpgradesUnderperformNeutral
Jun 2016JefferiesMaintainsHold
Apr 2016RosenblattUpgradesSellNeutral

View More Analyst Ratings for RS
View the Latest Analyst Ratings

Posted-In: Bank of America Timna TannersAnalyst Color Downgrades Analyst Ratings

 

Related Articles (RS)

View Comments and Join the Discussion!