Assessing Reliance (RS) Valuation As Analyst Optimism Builds Around Upcoming Earnings And Revenue Growth

Reliance (RS) is back in focus after Wall Street analysts flagged upbeat expectations for its upcoming quarterly results, pointing to higher earnings, revenue and net sales across carbon steel, alloy, stainless steel and aluminum products.

See our latest analysis for Reliance.

At a share price of $343.43, Reliance has pulled back over the last week but still carries a 30 day share price return of 5.99% and a 90 day gain of 28.96%. Its 1 year total shareholder return of 17.34% and 5 year total shareholder return of 183.85% point to momentum that has built over time as expectations around earnings and demand for its metal products have shifted.

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With Reliance shares trading at $343.43 and sitting above the current analyst price target, the key question is whether recent earnings optimism still leaves room for upside, or if the market is already pricing in future growth.

Most Popular Narrative: 5.8% Overvalued

Reliance last closed at $343.43, above the most followed fair value estimate of $324.63 that is built on detailed earnings and cash flow assumptions.

Consistently high cash flow generation and ongoing share repurchases are reducing share count and supporting shareholder returns, which, together with strong organic growth, can drive higher earnings per share (EPS) even if top-line growth is moderate.

Read the complete narrative.

Curious how steady revenue assumptions, firmer margins and a lower future P/E still point to this value gap? The full narrative lays out the earnings path, share count glide and discount rate that hold it all together.

Result: Fair Value of $324.63 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, this depends on demand not softening further in key end markets and on Reliance managing cost pressures that could squeeze margins and cash flow.

Find out about the key risks to this Reliance narrative.

Build Your Own Reliance Narrative

If you see the story differently, or prefer to test the assumptions yourself, you can build your own full Reliance view in minutes: Do it your way.

A great starting point for your Reliance research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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