Rosenblatt Reiterates Sell on Reliance Steel (RS) Reflecting Falling Price Realizations

Rosenblatt reiterated a Sell rating and $48.00 price target on Reliance Steel & Aluminum (NYSE: RS) as pricing pressures continue to show throughout the non-ferrous metal markets. Also, relative volume weakness is visible from Rosenblatt's carbon steel channel checks, and potential gross margin contraction associated with increased competitive pressures could limit the portfolio’s earnings power over the next 2-3 quarters.

Analyst Chris Olin commented, "We maintain a cautious near-term outlook on the shares of Reliance Steel (RS). Continued pricing pressures evident throughout the non-ferrous metal markets, relative volume weakness visible from our carbon steel channel checks, and potential gross margin contraction associated with increased competitive pressures could limit the portfolio’s earnings power over the next 2-3 quarters. We reduced the full-year 2016 EPS forecast to reflect falling price realizations for the stainless steel & aluminum product categories and a lowsingle-digit metal volume growth environment. Bottom-line, we believe it may be a challenge for RS to exceed $4.50 of earnings in the next fiscal year (below the final FY2015 performance)."

For an analyst ratings summary and ratings history on Reliance Steel & Aluminum click here. For more ratings news on Reliance Steel & Aluminum click here.

Shares of Reliance Steel & Aluminum closed at $57.91 yesterday.

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