Reliance Stock Rises 13% in 3 Months: What's Driving the Rally?

Reliance, Inc. RS shares have gained 12.7% over the past three months. The company has also outperformed the Zacks Mining-Miscellaneous industry’s 9.6% rise and the S&P 500’s roughly 7.4% increase over the same period.

Growth in Margins & Stability in End Markets

Reliance’s shipment levels demonstrated an increase of around 9% year over year and 5.6% on a same-store basis, aided by organic growth, strong domestic mill relationships and advance metal purchases by customers anticipating carbon steel and aluminum product price increases. The first quarter of 2025 also witnessed expansion in gross margins as the trade environment supported pricing improvements through March.

The company’s largest end market, non-residential construction, performed well in the past quarter, with expectations to maintain the momentum in the upcoming quarter. Constant demand in the market from continued new construction projects across diverse sectors, including data centers, energy infrastructure, manufacturing and public infrastructure, ensures stable conditions.

Reliance expects demand to remain stable across the diversified end markets it serves in the second quarter, notwithstanding ongoing uncertainties regarding domestic and international economic policy. The company anticipates its tons sold to be up 3-5% from the year-ago quarter.

With a 9.1% increase in regular quarterly dividend, the company declared its 32nd increase since its 1994 IPO. In the first quarter, RS repurchased 922,656 shares of its common stock for a total of $253.2 million. It ended the quarter with cash flow from operations of $64.5 million and cash and cash equivalents of $277.8 million, emphasizing the company’s financial flexibility and liquidity.

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).

Some better-ranked stocks in the Basic Materials space are Akzo Nobel N.V. AKZOY, Newmont Corporation NEM and Balchem Corporation BCPC. While AKZOY currently sports a Zacks Rank #1 (Strong Buy), NEM and BCPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Akzo Nobel’s current-year earnings is pegged at $1.66 per share, implying an 18.6% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing once.

The Zacks Consensus Estimate for NEM’s current-year earnings is pegged at $4.18 per share, indicating a 20.1% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 32.41%. NEM’s shares have gained 31% in the past year.

The Zacks Consensus Estimate for BCPC’s 2025 earnings is pegged at $5.15 per share, indicating a rise of 31% from year-ago levels. The company’s earnings beat the consensus estimate in two of the trailing four quarters while missing the rest. Its shares have gained 10% in the past year.

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

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