Reliance, Inc. (NYSE:RS) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 10% higher than the analysts had forecast, at US$5.2b, while EPS of US$7.84 beat analyst models by 14%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Reliance's seven analysts is for revenues of US$18.4b in 2027. This would reflect a satisfactory 6.2% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 15% to US$25.05. In the lead-up to this report, the analysts had been modelling revenues of US$17.8b and earnings per share (EPS) of US$23.93 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
See our latest analysis for Reliance
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$431, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Reliance, with the most bullish analyst valuing it at US$446 and the most bearish at US$420 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Reliance is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.9% annualised growth until the end of 2027. If achieved, this would be a much better result than the 0.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.0% annually. So while Reliance's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Reliance following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Reliance analysts - going out to 2028, and you can see them free on our platform here.
Even so, be aware that Reliance is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
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