[RS] Reliance Inc. Thesis 2026: Metals Service Center Drives Aerospace Plus Industrial Cycle
Key Takeaways
- Reliance Inc. (NYSE: RS) FY2025 revenue ~$13.7-14.4B (-3 to +3% YoY) with adj. EPS ~$15.30-16.85 reflecting continued post-2024 ~5.5-5.8M tons aggregate metals shipments + selected ~$1,500-1,700/ton aggregate average selling price (post-2024 carbon steel + stainless steel + aluminum + selected various metals pricing cycle stabilization) plus selected post-March 2024 ~$2.0B aggregate American Alloy Steel + selected post-2024 ~$1.0B aggregate selected various tuck-in M&A capacity + selected continued post-2024 ~$1.5-2B aggregate annual buyback program execution under continued President + CEO Karla Lewis (~3-year tenure since January 2023; ex-Reliance CFO 2002-2022 + ex-various Reliance roles + ~25-year company career; selected first female Reliance CEO; succeeded Jim Hoffman 2018-January 2023 retired who led Reliance through post-2018 strategic refocus + selected various M&A).
- Aggregate metals shipments + ASP cycle: ~5.5-5.8M tons aggregate metals shipments FY2025; ~$1,500-1,700/ton aggregate average selling price (selected post-2024 carbon steel + stainless steel + aluminum + selected various metals pricing cycle stabilization); selected continued post-2024 selected aerospace + industrial + selected various end-market case volume cycle.
- Aerospace + industrial end-market mix: aerospace + defense ~20% revenue + non-residential construction ~15% + industrial machinery ~10% + automotive ~10% + selected various ~45%; selected continued post-2024 aerospace cycle (Boeing + Airbus + Lockheed Martin + Northrop Grumman + selected various) + selected continued post-2024 industrial machinery + selected various; selected ~300+ aggregate metals service center locations across US + Canada + Mexico.
- Capital return:
$4.40 annual dividend FY2025 ($1.10/quarter; selected post-2024 ~+10% growth post-2024 $4.00; ~30+ year continuous dividend track post-1994 dividend initiation following Reliance NYSE listing); selected$1.5-2B aggregate FY2024-2025 buyback program ($1.0B+ aggregate FY2025 buybacks); ~$1.7-2.2B aggregate FY2025 capital return; selected post-2024 net cash position ~$0.6-0.9B; investment-grade Baa2/BBB credit rating; FY2026 catalyst: continued capital deployment + selected potential dividend acceleration.
Company Background
Reliance Inc. (NYSE: RS; previously Reliance Steel & Aluminum Co. through October 2024) is one of the largest North American metals service center companies with FY2025 revenue ~$13.7-14.4B (-3 to +3% YoY) and adj. EPS ~$15.30-16.85 reflecting continued post-2024 ~5.5-5.8M tons aggregate metals shipments + selected post-2024 metals pricing cycle stabilization. The company employs ~15,000+ globally with operations across selected ~300+ aggregate metals service center locations in US + Canada + Mexico.
Founded 1939 as Reliance Steel Company in Los Angeles California (~86-year heritage; selected one of US oldest continuing metals service center companies); selected post-1994 NYSE listing IPO; selected post-2008 ~$1.2B Metals USA acquisition; selected post-2008 ~$1B Earle M. Jorgensen acquisition; selected post-2010s selected various tuck-in acquisitions; selected post-2018 Jim Hoffman CEO appointment + post-2018 strategic refocus on selected aerospace + industrial + selected various; selected post-January 2023 Karla Lewis CEO appointment (selected first female Reliance CEO); selected post-October 2024 Reliance Steel & Aluminum → Reliance Inc. rebrand reflecting selected post-2018 selected various metals service center positioning; selected post-March 2024 ~$2.0B aggregate American Alloy Steel acquisition.
Headquartered in Scottsdale Arizona (selected post-2017 Los Angeles California → Scottsdale relocation); ~15,000+ employees globally with ~$13.7-14.4B revenue. Single primary product offering: metals service center distribution covering selected various carbon steel + stainless steel + aluminum + selected various nonferrous + alloy + selected various metals products serving selected major aerospace + defense + non-residential construction + industrial machinery + automotive + selected various end-markets. End-market mix: aerospace + defense ~20% + non-residential construction ~15% + industrial machinery ~10% + automotive ~10% + selected various ~45%. Geographic mix: US ~95%+ + Canada + Mexico ~5%.
President + CEO Karla Lewis since January 2023 (~3-year tenure; selected first female Reliance CEO); succeeded Jim Hoffman (CEO 2018-January 2023 retired who led Reliance through post-2018 strategic refocus + selected various M&A); Lewis ex-Reliance CFO 2002-2022 + ex-various Reliance roles + ~25-year company career; selected continued strategic priorities include aerospace + industrial cycle + selected post-2024 American Alloy Steel + selected various M&A integration + selected continued post-2024 capital return acceleration. CFO Steve Koch (since 2022).
Aggregate Metals Shipments + ASP Cycle
Reliance Inc. aggregate metals shipments + ASP cycle FY2025:
- Aggregate metals shipments: ~5.5-5.8M tons FY2025 (selected post-2024 stabilization)
- Aggregate average selling price (ASP): ~$1,500-1,700/ton FY2025 (post-2024 carbon steel + stainless steel + aluminum pricing cycle stabilization)
- Carbon steel: selected ~$1,200-1,500/ton FY2025
- Stainless steel: selected ~$3,000-3,500/ton FY2025
- Aluminum: selected ~$3,000-3,500/ton FY2025
- Selected various nonferrous + alloy: selected various pricing
FY2026 catalyst: continued shipments + ASP stabilization + ~$0.30-0.50 incremental annual EPS contribution.
Aerospace + Industrial End-Market Mix
Reliance Inc. end-market mix FY2025:
- Aerospace + Defense (~20% revenue): selected major Boeing + Airbus + Lockheed Martin + Northrop Grumman + selected various aerospace + defense; selected continued post-2024 aerospace cycle (selected various MAX + 787 + Airbus A320 + A350 + selected various)
- Non-residential construction (~15% revenue): selected continued post-2024 non-residential construction cycle
- Industrial machinery (~10% revenue): selected continued post-2024 industrial machinery
- Automotive (~10% revenue): selected continued post-2024 automotive
- Selected various (~45% revenue): selected continued post-2024 various end-markets
FY2026 catalyst: continued aerospace + industrial + selected various + ~$0.20-0.30 incremental EPS contribution.
Selected Various M&A + Capital Return
Reliance Inc. selected various M&A + capital return:
- American Alloy Steel (post-March 2024 ~$2.0B aggregate acquisition): selected major specialty metals service center
- Selected post-2024 ~$1.0B aggregate selected various tuck-in M&A: continued post-2024 selected various tuck-in M&A capacity
- Ordinary dividend:
$4.40 annual FY2025 ($1.10/quarter; ~+10% growth post-2024 $4.00; ~30+ year continuous dividend track post-1994 initiation) - Buybacks:
$1.0B+ aggregate FY2025 ($1.5-2B aggregate FY2024-2025) - Aggregate capital return: ~$1.7-2.2B FY2025
FY2026 catalyst: continued M&A integration + capital return + selected potential dividend acceleration.
Risks
- Metals pricing: continued metals pricing volatility (carbon steel + stainless steel + aluminum + selected various)
- Aerospace cyclical: continued aerospace cycle sustainability (Boeing 737 MAX recovery + selected various)
- Industrial machinery cyclical: continued industrial machinery + automotive cycle
- Selected various M&A integration: continued post-March 2024 American Alloy Steel + selected various integration
- Currency: USD/CAD + USD/MXN currency volatility
Key Core Metrics
| Metric | FY2025 | FY2024 | FY2023 | FY2022 | FY2026 outlook |
|---|---|---|---|---|---|
| Revenue | $13.7-14.4B | $13.84B | $14.81B | $17.03B | $13.5-14.5B |
| Adj. EBITDA | $1.7-1.85B | $1.65B | $2.1B | $3.0B | $1.7-1.95B |
| Adj. EPS | $15.30-16.85 | $15.10 | $20.55 | $30.65 | $16-18 |
| Adj. EBITDA margin | 12-13% | 12% | 14% | 18% | 12-13% |
| Aggregate metals shipments (Mt) | 5.5-5.8 | 5.6 | 5.8 | 6.1 | 5.6-5.9 |
| Capital return | FY2025 | FY2024 | FY2026 outlook |
|---|---|---|---|
| Dividend | $4.40 | $4.00 | $4.60-4.80 |
| Buybacks | $1.0-1.2B | $1.1B | $1.0-1.3B |
| Total return | $1.7-2.2B | $1.7B | $1.8-2.3B |
| ~30-year track | continuous | continuous | continuous (~31 years) |
Market Evaluation
Reliance Inc. trades at selected ~17-21x FY2026 P/E premium vs Steel Dynamics (~9-12x) + Olympic Steel (~12-15x) + Ryerson Holding (~10-13x) + selected various metals service center peers reflecting selected continued post-2024 ~5.5-5.8M tons aggregate metals shipments + selected post-2024 metals pricing cycle stabilization + selected ~30+ year continuous dividend track + selected ~$1.5-2B aggregate FY2024-2025 buyback program. Selected re-rating catalysts include: (1) continued aggregate metals shipments + ASP stabilization; (2) aerospace + industrial cycle continuation; (3) post-March 2024 American Alloy Steel + selected various M&A integration; (4) ~30+ year dividend track + ~+10% annual growth; (5) selected continued post-2024 capital return acceleration.
Aerospace + Industrial Cycle Strategic Differentiation Deep Dive
Reliance Inc. aerospace + industrial end-market mix represents selected primary differentiation thesis vs traditional metals service center peers (Steel Dynamics + Olympic Steel + Ryerson Holding + selected various). Selected ~20% aerospace + defense revenue mix + ~15% non-residential construction + ~10% industrial machinery + ~10% automotive + selected various ~45% creates selected diversified end-market exposure with selected aerospace + defense leadership supporting selected continued post-2024 Boeing + Airbus + Lockheed Martin + Northrop Grumman + selected various aerospace cycle. Selected ~300+ aggregate metals service center locations across US + Canada + Mexico support selected continued post-2024 customer service + selected various commercial cross-sell + selected various. Selected post-March 2024 ~$2.0B aggregate American Alloy Steel acquisition + selected post-2024 ~$1.0B aggregate selected various tuck-in M&A capacity supports selected continued post-2024 specialty metals + selected various end-market expansion. Selected ~30+ year continuous dividend track post-1994 NYSE listing + ~+10% annual dividend growth + ~$1.5-2B aggregate FY2024-2025 buyback program supports selected continued capital return acceleration. FY2026 catalyst: continued aerospace + industrial cycle + ~$0.20-0.40 incremental annual EPS contribution.
FY2026 thesis: Aggregate metals shipments + ASP stabilization + Aerospace + Industrial cycle + American Alloy Steel + selected various M&A integration + ~30+ year continuous dividend track + selected continued post-2024 capital return acceleration.