Reliance Steel & Aluminum Co. (DE) (RS) Company Bio
Reliance Steel provides metals processing services and distributes a line of numerous metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products. The company was founded in 1939 and is based in Los Angeles, California.
RS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Reliance Steel & Aluminum Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Reliance Steel & Aluminum Co ranked in the 87th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 1446.17%. The most interesting components of our discounted cash flow analysis for Reliance Steel & Aluminum Co ended up being:
The company has produced more trailing twelve month cash flow than 85.71% of its sector Basic Materials.
Reliance Steel & Aluminum Co's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 19.21% of tickers in our DCF set.
RS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 19.21% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RS, try VALE, USCR, GMS, HDSN, and BECN.
LOS ANGELES, Sept. 08, 2020 (GLOBE NEWSWIRE) -- Reliance Steel & Aluminum Co. (NYSE: RS) announced today that it has entered into an amended and restated $1.5 billion five-year unsecured revolving credit facility (the “Facility”) that will replace its existing credit agreement. The Facility includes an increase option for up to an additional $1.0 billion and allows for prepayments. The Facility does not have an outstanding balance. The Company intends to use funds borrowed under the Facility from time to time for general corporate purposes, growth and stockholder return activities. “We are very pleased with the favorable terms achieved for this new credit facility in the current challenging environment,” said Jim Hoffman, President and Chief Executive Officer of Reliance. “The Facilit...
Written by Sam Kovacs Introduction On Seeking Alpha, we update our “All Weather Dividend Portfolio” once a month. Since the inception of the model portfolio in May, it has been lacking any positions in the materials sector. I must confess it is a sector in which neither Robert or I...
Robert & Sam Kovacs on Seeking Alpha | July 27, 2020