Reliance, Inc.’s RS shares have gained 10.6% over the past three months. The company has also outperformed the Zacks Mining – Miscellaneous industry’s 6% rise over the same time frame. 

Let’s take a look into the factors that are driving RS stock.

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Healthy End-Market Demand & Acquisitions Aid RS Stock

Reliance is benefiting from continued strength in non-residential construction, its largest end market. Demand improved in this market in the fourth quarter from the year-ago quarter. RS expects demand in non-residential construction to remain at healthy levels in the first quarter of 2025, aided by new construction projects in diverse sectors. Demand for Reliance's toll processing services in the automotive market also improved in the fourth quarter. The company expects demand in this market to remain stable in the first quarter. 

Across the broader manufacturing sectors that the company serves, demand strengthened in the fourth quarter compared with the year-ago quarter. RS expects demand for its products across the broader manufacturing sectors to be relatively stable in the first quarter. The first quarter is also expected to benefit from high demand in the military and space-related portions of Reliance’s aerospace business.

Reliance also remains focused on driving growth through acquisitions. RS has been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. It has completed 76 acquisitions since its IPO in 1994, which have expanded its product diversification and value-added processing capabilities.

Reliance's strong liquidity position also allows it to drive shareholder value. The company returned roughly $250 million to shareholders in cash dividends and repurchased a record $1.1 billion in shares in 2024. It raised its quarterly dividend by around 9% to $1.20 per share. RS ended 2024 with cash and cash equivalents of $318.1 million. It generated $1.43 billion in cash flow from operations during the year, aided by prudent working capital management and profitability.

Reliance, Inc. Price and Consensus

Reliance, Inc. price-consensus-chart | Reliance, Inc. Quote

RS’ Zacks Rank & Key Picks

RS currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. AXTA, Ingevity Corporation NGVT and Carpenter Technology Corporation CRS. While AXTA and NGVT sport a Zacks Rank #1 (Strong Buy), CRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Axalta Coating’s 2025 earnings is pegged at $2.55, indicating a rise of 8.5% from year-ago levels. AXTA beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.3%, on average. 

The Zacks Consensus Estimate for Ingevity’s 2025 earnings is pegged at $4.45, indicating a rise of 26.8% from year-ago levels. The consensus estimate for NGVT’s 2025 earnings has increased by 29% in the past 60 days. 

The consensus estimate for Carpenter Technology for the current fiscal year stands at $6.95, reflecting a 46.6% year-over-year increase. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%.

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Reliance, Inc. (RS) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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