RS Shares Rally 21% in 6 Months: Here's What's Driving the Upside

Reliance, Inc.’s RS shares have rallied 21% in the past six months. The company has also outperformed the Zacks Mining - Miscellaneous industry’s 2% growth over the same time frame. 

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The rally was driven by improving demand across non-residential construction, data centers and energy infrastructure, along with strong growth from the DHS border wall project. Also,  disciplined acquisitions, strong liquidity and continued shareholder returns aided the upside. 

Reliance Benefits From Healthy Demand & Acquisitions

Reliance continues to benefit from the non-residential construction market, its largest end market by volume, where demand improved year over year in the second quarter. Strong activity across data centers, energy infrastructure and public infrastructure projects is supporting healthy demand, and the company expects this momentum to continue despite potential supply availability constraints. The Department of Homeland Security border wall project has emerged as an even stronger growth driver than initially expected, contributing meaningfully to second-quarter earnings and shipments, with benefits expected to continue through the second half of 2026.  

Demand for the company's automotive toll processing services also improved and is expected to remain steady, while semiconductor demand strengthened significantly on rising data-center activity. In addition, Reliance reported improving aerospace demand, continued strength across industrial machinery, shipbuilding and defense-related manufacturing, and expects demand across its diversified end markets to remain healthy. 

Reliance continues to execute its long-term growth strategy through disciplined acquisitions that expand its geographic footprint, diversify its product portfolio and strengthen its value-added processing capabilities. Acquisitions, including Metals USA, Tubular Steel, Ferguson, Fry Steel Company, Merfish United, Rotax, Admiral Metals, Nu-Tech Precision Metals and American Alloy, have broadened its presence across key end markets and increased exposure to higher-margin specialty products. 

The company remains focused on acquiring high-quality businesses with strong customer relationships, differentiated offerings and attractive margins that complement its existing operations. Management stated that Reliance’s strong balance sheet and liquidity provide the financial flexibility to pursue strategic growth investments while continuing to return capital to shareholders through dividends and share repurchases. 

Reliance is dedicated to delivering value to its investors, backed by a strong liquidity position. It returned $63.8 million to stockholders through dividend payments in the second quarter of 2026. It repurchased $3.4 billion of its common stock since 2021 at an average price of approximately $234 per share, reducing shares outstanding by 22%. The company’s board has raised its quarterly dividend by 4.2% to $1.25 per share. 

It ended the second quarter of 2026 with cash and cash equivalents of $235.4 million. It generated $162.2 million in cash flow from operations during the last reported quarter, aided by prudent working capital management and profitability.

RS’ Zacks Rank & Key Picks

RS carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Basic Materials space are Worthington Steel, Inc. WS, Carpenter Technology Corporation CRS and Avient Corporation AVNT. WS currently sports a Zacks Rank #1 (Strong Buy), while CRS and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for WS’ current-year earnings stands at $3.4 per share, implying a 52.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 13.8%. Shares of the company have gone down by around 23.1% in the past six months.

The Zacks Consensus Estimate for CRS’s fiscal current-year earnings is pegged at $13.08 per share, implying a 21.6% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.4%. Shares of CRS have surged around 20.1% in the past six months.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%. Shares of AVNT have surged around 8% in the past six months.

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

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