In a report published Wednesday, Bank of America analyst Timna Tanners downgraded the rating on Reliance Steel & Aluminum 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.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in