UPDATE: Goldman Sachs Downgrades Reliance Steel & Aluminum to Neutral, Raises PT as Near-Term Destocking Limits Upside

In a report published Monday, Goldman Sachs analyst Sal Tharani downgraded the rating on Reliance Steel & Aluminum RS from Buy to Neutral, but raised the price target from $80.00 to $82.00. In the report, Goldman Sachs noted, “We downgrade RS to Neutral from Buy as we now see higher upside potential and stronger catalysts in other non-res levered name, STLD. While we remain positive on the long-term outlook for Reliance on the back of its organic and acquisition related growth opportunities and its strong non-res exposure, RS earnings are expected to remain under pressure near-term due to aerospace aluminum plate destocking and a slow recovery which had been a very high margin product for RS. We raise our 6-month P/E- and EV/EBITDA-based price target to $82 from $80, implying 12% upside, as we update our methodology to include a 50% weighting on normalized (mid-cycle) estimates and a 50% weighing on 2014 estimates.” Reliance Steel & Aluminum closed on Friday at $73.53.