JPMorgan initiates Reliance Steel & Aluminum stock with Overweight rating

Investing.com - JPMorgan initiated coverage on Reliance Steel & Aluminum (NYSE:RS) with an Overweight rating and a $350.00 price target for December 2026.

The investment bank cited Reliance’s resilient through-cycle margin profile, which it believes is underappreciated in the current market environment challenged by trade and interest rate uncertainty.

JPMorgan noted that while Reliance shares have rallied 11% year-to-date, relatively in line with North American peers at 9% but lagging mills at 18%, the stock is currently 13% off its third-quarter peak.

Despite anticipating muted real demand to persist into 2026, JPMorgan highlighted Reliance’s demonstrated ability to drive same-store shipment growth that consistently outpaces peers, industrial production, and steel apparent consumption.

The bank also pointed to Reliance’s economic moat and ability to invest in organic growth and potential mergers and acquisitions, which should be strengthened by structurally higher metal pricing driven by Section 232 tariffs.

In other recent news, Reliance Inc. reported strong financial results for the second quarter of 2025. The company achieved a 17.5% increase in non-GAAP earnings per share, reaching $4.43. Reliance also generated $229 million in cash flow from operations and maintained a gross profit margin between 29% and 31%. In another development, Reliance has secured a $400 million unsecured term loan facility maturing in August 2028. This facility was used to refinance the company’s maturing $400 million senior unsecured notes. Additionally, Wells Fargo has initiated coverage on Reliance Steel & Aluminum with an Equal Weight rating and set a price target of $296.00. The rating reflects an 11x 2026E EV/EBITDA multiple, which is above the company’s five-year average. These recent developments highlight Reliance’s strategic financial management and market positioning.

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