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Russel Metals Inc.
Connecting The Dots: RUS flash read-through – Worthington flagging signs of improvement in February
TSX: RUS | CAD 39.42 | Outperform | Price Target CAD 50.00
Sentiment: Positive
Our view. Worthington Steel (not covered) yesterday reported FQ3/25 EPS of $0.35, below consensus $0.82, with management flagging that headwinds from FQ2 continued into FQ3 as customers managed uncertainty, consistent with our view the Q1 results at Russel will be under pressure due to weak steel prices early in the quarter. That said, we view the update from Worthington as a positive, reflecting commentary on the outlook that management saw signs of improvement in February that continued into March. Key is that management believes most of the volume improvement at the end of the quarter was due to fundamental demand improvements rather than a buy ahead effort to beat potential steel price increases. While we are cognizant of Russel's Canadian exposure (~60%), we nevertheless view commentary as a positive and as supporting our view that Russel's earnings are going to inflect in Q2 and Q3. With Russel trading at 10x consensus 2025 P/E (with no debt), well below peers, we continue to flag an attractive investment opportunity at current levels.
What happened? Worthington Steel last night reported FQ3/25 adjusted EPS of $0.35 below consensus $0.82.
