Ryerson expects to realize $13-$14 mln in Q3 synergies from the Olympic Steel merger
Company anticipates annualized synergy run-rate of $52-$56 mln, exceeding $40 mln first-year target
Overview
US industrial metals distributor's Q2 revenue rose 72% yr/yr after the Olympic Steel merger
Adjusted EPS for Q2 increased to $0.52 from $0.08 a year earlier
Company realized $5 mln in Q2 merger synergies, expects to exceed first-year target early
Result drivers
Merger impact - Olympic Steel contributed $564 mln in revenue and helped drive a 22.6% increase in tons shipped in Q2, Ryerson's first full quarter post-merger
Higher selling prices - Average selling prices rose 4.5% sequentially and 6.9% yr/yr, contributing to revenue growth
Synergy realization - Co achieved $5 mln in Q2 merger synergies and expects to exceed its $40 mln first-year synergy run-rate target ahead of schedule
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the iron & steel peer group is "buy"
Wall Street's median 12-month price target for Ryerson Holding Corp is $29.00, about 6.5% below its July 28 closing price of $31.03
The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 16 three months ago
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