Worthington Steel, Inc. (WS)
NYSE:WS
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Worthington Steel, Inc.
(NYSE:WS)
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Rating:65Neutral
Price Target:
$47.00
▲(54.86% Upside)
Action:Reiterated
Date:06/03/26
The score is driven primarily by mixed financial performance (positive profitability and cash flow but balance-sheet uncertainty and cyclicality) and a strong technical uptrend. The latest earnings call supports a moderately positive outlook tied to automotive gains and strategic progress, tempered by near-term volatility, working-capital pressure, and acquisition-related costs/leverage; valuation is reasonable but not a standout.
Positive Factors
Free Cash Flow Generation
Sustained positive TTM operating cash flow and a marked free cash flow improvement provide durable internal funding for capex, dividends and strategic M&A. Reliable cash generation increases optionality, reduces reliance on short-term markets and supports continued investment in higher-margin processing.
Negative Factors
Acquisition‑related Secured Leverage
Large secured financings materially increase fixed obligations and collateralized liens, reducing financial flexibility. Higher secured leverage raises refinancing and covenant risk during industry downturns and leaves less cushion for cyclical working‑capital swings, making execution on integration critical.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Generation
Sustained positive TTM operating cash flow and a marked free cash flow improvement provide durable internal funding for capex, dividends and strategic M&A. Reliable cash generation increases optionality, reduces reliance on short-term markets and supports continued investment in higher-margin processing.
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 FlyWorthington Steel, Inc. (WS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.12B
Dividend Yield1.78%
Average Volume (3M)226.58K
Price to Earnings (P/E)16.7
Beta (1Y)1.76
Revenue Growth5.55%
EPS Growth11.54%
CountryUS
Employees5,000
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)2.46
Shares Outstanding50,806,340
10 Day Avg. Volume237,304
30 Day Avg. Volume226,577
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)1.15
Price to Sales (P/S)0.40
P/FCF Ratio12.34
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.70
Enterprise Value/Gross Profit5.66
Enterprise Value/Ebitda9.08
Forecast
1Y Price Target
$46.00Price Target Upside51.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.45
Revenue Forecast (FY)$3.60B
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 (1) purchasing flat-rolled steel (typically coil) from steel producers and (2) earning revenue from selling processed steel products and services to customers at a price that reflects the input steel cost plus a value-a...
Worthington Steel, Inc. Earnings Call Summary
Earnings Call Date:Mar 25, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 24, 2026
Earnings Call Sentiment Neutral
The call conveyed a balanced picture: tangible strategic progress (Kloeckner acquisition advancing, clear automotive share gains, meaningful transformation and free cash flow generation) and several operational positives (direct sales mix shift, electrical steel progress). Offsetting these were near-term operational and regional headwinds (7% shipment decline, 22% toll-processing drop, Europe/CEDIM underperformance), acquisition-related expenses, OEM timing delays, and working-capital pressure from volatile steel prices. Management’s tone was cautiously optimistic about market recovery in the back half of the year but pragmatic about current softness.Positive Updates
Kloeckner acquisition progressing
Proposed acquisition of Kloeckner proceeding via voluntary tender offer; initial acceptance period closing with confidence in meeting 57.5% threshold, regulatory approvals beginning to arrive, transaction expected to close in H2 calendar 2026. Management reporting strong cultural fit and positive external response from customers, suppliers and investors.
Negative Updates
Adjusted profitability and EPS contraction
Adjusted EBIT fell to $20.0 million in Q3, down $5.3 million from $25.3 million year over year. Adjusted EPS declined to $0.27 from $0.35 in the prior-year quarter. GAAP earnings were $10.4 million, or $0.20 per share, versus $13.8 million, or $0.27 per share, prior-year.
Read all updates
Q3-2026 Updates
Positive
Negative
Kloeckner acquisition progressing
Proposed acquisition of Kloeckner proceeding via voluntary tender offer; initial acceptance period closing with confidence in meeting 57.5% threshold, regulatory approvals beginning to arrive, transaction expected to close in H2 calendar 2026. Management reporting strong cultural fit and positive external response from customers, suppliers and investors.
Read all positive updates
Company Guidance
Management guided to cautious optimism for the back half of calendar‑year 2026, expecting the Kloeckner tender to clear the 57.5% threshold and close in H2 CY2026 (Worthington has bought ~8% of Kloeckner shares for ~$101M using a $126M ABL), warned of near‑term steel price volatility with hot‑rolled coil near $975/ton and estimated FY2026 pretax inventory holding gains of $15–$20M, and forecast upward working‑capital pressure in Q4; they reiterated market recoveries (automotive strength—direct shipments to the Detroit Three up ~13% and direct automotive shipments +10% YoY—expecting broader auto, heavy‑truck/trailer and construction pick‑ups later in the year, and agriculture to begin a slow rebound late CY2026). Financial and capital guidance included Q3 operating cash flow $63.0M and free cash flow $33.0M (TTM FCF $81.0M), Q3 CapEx $30.0M with FY2026 CapEx expected $110–$115M, ending cash $90.0M and net debt $161.0M, and a quarterly dividend of $0.16/share payable June 26, 2026. Operational timing highlights: Canada electrical‑steel site >60% of added capacity sold and equipment moved over the next few months, Mexico traction‑motor lamination begins shipping this quarter with full production expected by fiscal 2029 at ~75% capacity on current contracts.Worthington Steel, Inc. Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
45
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | May 2025 | May 2024 | May 2023 | May 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.35B | 3.09B | 3.43B | 3.61B | 4.07B | 2.13B |
| Gross Profit | 411.50M | 388.60M | 439.80M | 336.50M | 395.50M | 370.84M |
| EBITDA | 256.30M | 221.20M | 287.50M | 201.30M | 316.80M | 268.36M |
| Net Income | 121.20M | 110.70M | 154.70M | 87.10M | 180.40M | 171.01M |
Balance Sheet | ||||||
| Total Assets | 2.32B | 1.96B | 1.87B | 1.76B | 2.08B | 1.37B |
| Cash, Cash Equivalents and Short-Term Investments | 90.00M | 38.00M | 40.20M | 32.70M | 20.05M | 17.46M |
| Total Debt | 352.60M | 227.90M | 223.90M | 80.40M | 153.90M | 8.11M |
| Total Liabilities | 958.10M | 763.90M | 748.90M | 609.80M | 817.66M | 551.82M |
| Stockholders Equity | 1.12B | 1.07B | 985.30M | 1.03B | 1.13B | 661.33M |
Cash Flow | ||||||
| Free Cash Flow | 164.70M | 99.90M | 96.10M | 269.54M | 3.05M | 123.75M |
| Operating Cash Flow | 210.20M | 230.30M | 199.50M | 315.01M | 39.49M | 152.55M |
| Investing Cash Flow | -225.50M | -129.10M | -132.00M | -22.15M | -395.35M | -27.69M |
| Financing Cash Flow | 42.10M | -48.50M | -60.00M | -280.23M | 358.45M | -116.68M |
Worthington Steel, Inc. Technical Analysis
Positive
30.35
Price Trends
38.49
Positive
38.52
Positive
35.73
Positive
Market Momentum
1.05
Positive
53.57
Neutral
51.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WS, the sentiment is Positive. The current price of 30.35 is below the 20-day moving average (MA) of 41.29, below the 50-day MA of 38.49, and below the 200-day MA of 35.73, indicating a bullish trend. The MACD of 1.05 indicates Positive momentum. The RSI at 53.57 is Neutral, neither overbought nor oversold. The STOCH value of 51.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.12B | 16.70 | 10.97% | 1.78% | 5.55% | 11.54% | |
62 Neutral | $8.47B | 30.87 | 2.53% | 2.92% | 4.46% | -47.34% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $5.21B | 8.23 | 4.48% | ― | -5.87% | -81.34% | |
48 Neutral | $124.55M | 106.30 | 1.40% | ― | -51.72% | ― | |
41 Neutral | $1.57B | -4.56 | -12.83% | ― | 2.16% | 20.46% |
* Basic Materials Sector Average
WS
Worthington Steel, Inc.
40.65
15.41
61.07%
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4.62
1.73
59.86%
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Grupo Simec SA De CV
30.13
1.87
6.62%
SID
Companhia Siderúrgica Nacional
1.21
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-19.87%
ACNT
Ascent Industries
13.68
1.26
10.14%
Worthington Steel, Inc. Corporate Events
Business Operations and StrategyDelistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Worthington Steel Advances Kloeckner Acquisition with Delisting Plan
Positive
Jun 3, 2026
On April 14, 2026, Worthington Steel secured a majority stake in Kloeckner Co SE via a voluntary public takeover offer, and by June 3, 2026 it held about 61–62% of Kloeckner’s outstanding shares after settling tenders at €11 per...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Worthington Steel Secures Financing for Kloeckner Acquisition
Positive
Jun 2, 2026
On June 1, 2026, Worthington Steel, Inc. issued $700 million of 7.750% senior secured notes due 2033 and closed a parallel $700 million seven-year senior secured term loan B facility, both secured by substantially all of the company’s and ce...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Worthington Steel Cleared to Complete Klöckner Acquisition Deal
Positive
May 27, 2026
On May 27, 2026, Worthington Steel said Germany’s Federal Cartel Office cleared its planned acquisition of Klöckner, removing the final regulatory hurdle for the deal. With all offer conditions now satisfied, the company and its BidCo v...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Worthington Steel Launches $900 Million Notes for Acquisition
Neutral
May 26, 2026
On May 26, 2026, Worthington Steel announced that its wholly owned subsidiary WS Escrow LLC launched a private offering of $900 million in senior secured notes due 2033, targeted exclusively at qualified institutional buyers and certain non-U.S. i...
Business Operations and StrategyDelistings and Listing ChangesM&A Transactions
Worthington Steel Secures Majority Stake in Klöckner & Co
Positive
Mar 31, 2026
On March 31, 2026, Worthington Steel reported that its voluntary public cash takeover offer for German steel and metal processor Klöckner Co SE cleared the 57.5% minimum acceptance threshold, securing about 58.8% of Klöckner’s sha...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Worthington Steel Posts Q3 Results, Pursues Kloeckner Acquisition
Negative
Mar 26, 2026
On March 25, 2026, Worthington Steel reported fiscal third‑quarter 2026 results for the period ended February 28, 2026, showing net sales up 12% year over year to $769.8 million, driven by higher direct volumes and selling prices, but operat...
Business Operations and StrategyM&A Transactions
Worthington Steel Lowers Threshold in Klöckner Takeover Bid
Positive
Mar 10, 2026
On March 10, 2026, Worthington Steel’s German subsidiary amended its voluntary all-cash takeover offer for Germany’s Klöckner Co SE by lowering the minimum acceptance threshold from 65% to 57.5% of outstanding shares, while keepi...
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.