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Worthington Steel, Inc.
(NYSE:WS)
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Rating:49Neutral
Price Target:
$35.00
â–²(2.91% Upside)
Action:Reiterated
Date:07/01/26
Overall score reflects pressured financial quality (earnings compression and reduced equity cushion) and weak technical trend (price below all key moving averages). Valuation is also unfavorable with a very high P/E relative to current profitability. Offsetting these, management outlined credible post-acquisition synergy and working-capital goals and continued dividends, but near-term volatility and integration execution risk remain significant.
Positive Factors
Klöckner acquisition expands scale and diversification
The Klöckner combination materially broadens Worthington Steel’s product range, geographic footprint, and end-market exposure. Management has quantified substantial synergy and working-capital opportunities, creating a multi-quarter pathway to greater scale, operating leverage, and improved cash deployment.
Negative Factors
Reduced equity cushion and higher debt
The sharp reduction in reported equity substantially weakens the balance-sheet cushion, while higher debt increases financial obligations after the acquisition. Even with moderate debt-to-equity in the latest period, the smaller capital base leaves less resilience if steel demand, spreads, or cash conversion deteriorate.
Read all positive and negative factors
Positive Factors
Negative Factors
Klöckner acquisition expands scale and diversification
The Klöckner combination materially broadens Worthington Steel’s product range, geographic footprint, and end-market exposure. Management has quantified substantial synergy and working-capital opportunities, creating a multi-quarter pathway to greater scale, operating leverage, and improved cash deployment.
Read all positive factors
Worthington Steel, Inc. Key Performance Indicators (KPIs)
Any
Net Sales by End Market
Breaks revenue down by customer sectors—such as construction, energy, automotive, and manufacturing—to show where demand is coming from and where exposure lies. A diversified mix reduces reliance on any single cyclical market; heavy concentration in one end market raises risk if that sector slows or faces pricing pressure.
Breaks revenue down by customer sectors—such as construction, energy, automotive, and manufacturing—to show where demand is coming from and where exposure lies. A diversified mix reduces reliance on any single cyclical market; heavy concentration in one end market raises risk if that sector slows or faces pricing pressure.
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The Fly
The FlyWorthington Steel, Inc. (WS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.81B
Dividend Yield1.85%
Average Volume (3M)229.12K
Price to Earnings (P/E)98.6
Beta (1Y)1.73
Revenue Growth11.33%
EPS Growth-92.60%
CountryUS
Employees5,400
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)0.35
Shares Outstanding50,946,617
10 Day Avg. Volume255,016
30 Day Avg. Volume229,121
Financial Highlights & Ratios
PEG Ratio-1.44
Price to Book (P/B)1.98
Price to Sales (P/S)0.62
P/FCF Ratio26.56
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$46.00Price Target Upside35.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)3.42
Revenue Forecast (FY)$7.62B
Worthington Steel, Inc. Business Overview & Revenue Model
Company Description
Worthington Steel, Inc. functions as a specialized steel processing enterprise serving the North American market. The company supplies a variety of steel products, notably flat-rolled carbon steel, custom-welded blanks (both steel and aluminum var...
How the Company Makes Money
WS primarily makes money by purchasing flat-rolled steel (e.g., coil) from steel producers and selling processed steel products to customers at a margin that reflects (a) the cost of steel input, (b) the value of processing performed, and (c) logi...
Worthington Steel, Inc. Earnings Call Summary
Earnings Call Date:Jun 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 06, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: materially positive strategic progress (completion of the Klöckner acquisition, clear synergy targets, expanded product mix and scale, operational improvements, AI deployments, and several end-market share gains) alongside near-term financial pressures (a large $94.5M electrical steel impairment, a reported net loss for the quarter, lower adjusted EBIT and EPS, declines in toll volumes and some end markets, and transaction-related costs). Management emphasized cash generation, liquidity, and a disciplined integration plan, but acknowledged volatility and integration execution risk.Positive Updates
Completion of Klöckner Acquisition and Strategic Scale Expansion
Completed purchase of a majority (~62%) interest in Klöckner on June 3; largest acquisition in company history. Expands product mix (aluminum, stainless, long products, plate, fabrication), geographic footprint, and end-market diversification. Raised more than $1.0 billion of new capital to support the transaction. Management targets $150 million of run-rate EBITDA synergies plus an additional ~$150 million of working capital opportunities, with roughly a 50/50 split between year one and year two, and a plan to cut debt roughly in half in the same period.
Negative Updates
Significant Non-Cash Impairment in Electrical Steel
Recorded a $94.5 million pre-tax non-cash impairment in the electrical steel reporting unit (equivalent to $1.31 per share), including goodwill and long-lived asset impairments. Management cited softer European activity, increased foreign competition in the U.S., and a temporary slowdown in industrial motor demand as drivers.
Read all updates
Q4-2026 Updates
Positive
Negative
Completion of Klöckner Acquisition and Strategic Scale Expansion
Completed purchase of a majority (~62%) interest in Klöckner on June 3; largest acquisition in company history. Expands product mix (aluminum, stainless, long products, plate, fabrication), geographic footprint, and end-market diversification. Raised more than $1.0 billion of new capital to support the transaction. Management targets $150 million of run-rate EBITDA synergies plus an additional ~$150 million of working capital opportunities, with roughly a 50/50 split between year one and year two, and a plan to cut debt roughly in half in the same period.
Read all positive updates
Company Guidance
The company’s guidance and near-term priorities center on integrating Klöckner and delivering quantified synergies and cash benefits: $150 million of run-rate EBITDA synergies plus roughly $150 million of working capital opportunity (split roughly 50/50 across year one and year two) with a goal to cut debt in half in the same period; Worthington now owns ~62% of Klöckner and raised more than $1 billion of new capital. For fiscal 2027 the company expects legacy Worthington Steel capital expenditures of about $60 million, announced a quarterly dividend of $0.16 per share payable Sept. 29, 2026, and estimated Q1 FY2027 pre-tax inventory holding gains of $10–$15 million. Recent operating/financial metrics referenced to frame the guidance include Q4 net sales of $929.2 million, adjusted EBITDA $75.2 million, adjusted EBIT $54 million, adjusted EPS $0.74, reported net loss attributable to controlling interest of $48.7 million (‑$0.98 per share) including a $94.5 million pre-tax electrical steel impairment; shipments of ~939,000 tons (down 44,000 tons, ‑4% YoY) with direct sales 65% of mix (up from 60%) and direct volume +3% (auto +5%, energy +24%, agriculture +11%, construction ‑14%, heavy truck ‑14%, toll volumes ‑15%); quarterly cash from operations $45 million, free cash flow $8 million (trailing 12‑month FCF $80 million), Q4 capex $37.1 million, and cash of $85 million with net debt of $172 million prior to the Klöckner settlement; combined results for the enlarged company are expected to be reported next quarter.Worthington Steel, Inc. Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
46
Neutral
Cash Flow
62
Positive
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.44B | 3.09B | 3.43B | 3.61B | 4.07B |
| Gross Profit | 402.60M | 388.60M | 439.80M | 336.50M | 395.50M |
| EBITDA | 189.90M | 221.20M | 287.50M | 201.30M | 316.80M |
| Net Income | 17.30M | 110.70M | 154.70M | 87.10M | 180.40M |
Balance Sheet | |||||
| Total Assets | 2.27B | 1.96B | 1.87B | 1.76B | 2.08B |
| Cash, Cash Equivalents and Short-Term Investments | 84.60M | 38.00M | 40.20M | 32.70M | 20.05M |
| Total Debt | 354.40M | 227.90M | 223.90M | 80.40M | 153.90M |
| Total Liabilities | 990.20M | 763.90M | 748.90M | 609.80M | 817.66M |
| Stockholders Equity | 1.07B | 1.07B | 985.30M | 1.03B | 1.13B |
Cash Flow | |||||
| Free Cash Flow | 80.00M | 99.90M | 96.10M | 269.54M | 3.05M |
| Operating Cash Flow | 201.20M | 230.30M | 199.50M | 315.01M | 39.49M |
| Investing Cash Flow | -219.40M | -129.10M | -132.00M | -22.15M | -395.35M |
| Financing Cash Flow | 9.00M | -48.50M | -60.00M | -280.23M | 358.45M |
Worthington Steel, Inc. Technical Analysis
Negative
34.01
Price Trends
35.31
Negative
37.44
Negative
37.10
Negative
Market Momentum
-0.33
Negative
44.06
Neutral
57.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WS, the sentiment is Negative. The current price of 34.01 is below the 20-day moving average (MA) of 35.50, below the 50-day MA of 35.31, and below the 200-day MA of 37.10, indicating a bearish trend. The MACD of -0.33 indicates Negative momentum. The RSI at 44.06 is Neutral, neither overbought nor oversold. The STOCH value of 57.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WS.
Worthington Steel, Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $9.30B | 30.87 | 2.53% | 3.00% | 8.98% | -21.39% | |
61 Neutral | $5.18B | 6.40 | 3.83% | 8.18% | 7.95% | -38.27% | |
52 Neutral | $1.71B | -3.92 | -18.55% | 12.27% | 9.29% | -26.44% | |
50 Neutral | $135.14M | -32.11 | -5.25% | 1.54% | -34.20% | -59.08% | |
49 Neutral | $1.81B | 98.60 | 1.52% | 1.85% | 11.33% | -92.60% |
* Basic Materials Sector Average
WS
Worthington Steel, Inc.
34.51
1.64
4.99%
GGB
Gerdau SA
5.01
1.99
65.89%
SIM
Grupo Simec SA De CV
27.70
-0.36
-1.28%
SID
Companhia Siderúrgica Nacional
1.33
-0.13
-8.90%
ACNT
Ascent Industries
15.09
2.83
23.08%
Worthington Steel, Inc. Corporate Events
Business Operations and StrategyDelistings and Listing ChangesM&A TransactionsShareholder Meetings
Worthington Steel Signs Domination and Profit Transfer Deal
Neutral
Sep 8, 2026
On September 8, 2026, Worthington Steel GmbH, an indirect wholly owned subsidiary of Worthington Steel, Inc., signed a Domination and Profit and Loss Transfer Agreement with Kloeckner Co SE, following Worthington Steel’s voluntary takeover ...
Business Operations and StrategyPrivate Placements and Financing
Worthington Steel Secures New $550 Million Credit Facility
Positive
Jun 30, 2026
On June 25, 2026, Worthington Steel, Inc. entered into a new asset-based revolving credit agreement with a syndicate of lenders led by Wells Fargo Bank that replaces its prior revolving facility. The new ABL facility provides up to $550 million in...
Business Operations and StrategyExecutive/Board ChangesDividendsFinancial DisclosuresM&A Transactions
Worthington Steel Reports Loss Amid Kloeckner Integration Progress
Negative
Jun 25, 2026
On June 23, 2026, Worthington Steel announced the retirement of Corporate Controller and Principal Accounting Officer Steven R. Witt, effective the same day, and the appointment of Gwen Joseph, formerly Director of External Reporting, to succeed h...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.