Ahead Of The Bell: Reliance Steel & Aluminum

NEW YORK (AP) — Improving demand for steel and aluminum plus signs that the economy is improving led an analyst Monday to upgrade shares of Reliance Steel & Aluminum Co.

KeyBanc analyst Mark Parr upgraded shares of the Los Angeles-company to "Buy" from "Hold," citing an "emerging macro recovery" and "broad-based demand stabilization."

The analyst also raised his earnings estimates for Reliance's third quarter to 50 cents per share from 20 cents per share and his fourth-quarter estimate to 66 cents per share from 45 cents per share.

Analysts polled by Thomson Reuters expect, on average, third-quarter earnings per share of 21 cents and fourth-quarter earnings per share of 36 cents.

"We sense Reliance is poised to benefit from increased potential for more broad-based demand recovery emerging over the next several quarters, substantial resolution of inventory mismatches, and restoration of more normalized first-in-first-out gross margins," he wrote in a client note.

Parr set a $54 price target on the stock.

In premarket trading, shares fell 52 cents to $42.08. In the last 52 weeks, the stock has ranged from $12.58 to $48.60.