Worthington Steel (NYSE:WS) Shares Gap Down - Here's Why

Key Points

• Worthington Steel shares gapped down on Thursday, opening at $38.03 after closing at $39.62 and later trading around $35.83, an intraday drop of about 8.2%.
• Despite the pullback, the company reported quarterly EPS of $0.74, slightly beating estimates, though revenue of $929.2 million came in below consensus expectations of $992 million.
• Analysts currently have a Hold outlook on the stock overall, with an average price target of $46.00; Worthington Steel also declared a quarterly dividend of $0.16 per share.

Worthington Steel, Inc. (NYSE:WS - Get Free Report) shares gapped down before the market opened on Thursday . The stock had previously closed at $39.62, but opened at $38.03. Worthington Steel shares last traded at $35.8250, with a volume of 54,554 shares trading hands.

Wall Street Analysts Forecast Growth

WS has been the subject of a number of analyst reports. Weiss Ratings reiterated a "hold (c)" rating on shares of Worthington Steel in a research note on Monday, April 20th. Zacks Research upgraded shares of Worthington Steel from a "strong sell" rating to a "hold" rating in a report on Monday, May 25th. KeyCorp lifted their price objective on shares of Worthington Steel from $38.00 to $46.00 and gave the company an "overweight" rating in a research note on Tuesday, June 2nd. Finally, Wall Street Zen cut shares of Worthington Steel from a "buy" rating to a "hold" rating in a report on Saturday, April 11th. One equities research analyst has rated the stock with a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average target price of $46.00.

Worthington Steel Trading Down 8.2%

The stock has a market capitalization of $1.85 billion, a price-to-earnings ratio of 21.43 and a beta of 2.22. The company has a current ratio of 1.48, a quick ratio of 0.90 and a debt-to-equity ratio of 0.03. The company has a fifty day moving average of $39.53 and a two-hundred day moving average of $38.27.

Worthington Steel (NYSE:WS - Get Free Report) last announced its quarterly earnings results on Thursday, June 25th. The company reported $0.74 EPS for the quarter, beating the consensus estimate of $0.73 by $0.01. Worthington Steel had a return on equity of 10.12% and a net margin of 3.64%.The company had revenue of $929.20 million for the quarter, compared to the consensus estimate of $992.00 million. During the same quarter last year, the company posted $1.05 earnings per share. The company's revenue for the quarter was up 11.6% compared to the same quarter last year. On average, research analysts expect that Worthington Steel, Inc. will post 2.15 EPS for the current year.

Worthington Steel Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 29th. Investors of record on Tuesday, September 15th will be issued a $0.16 dividend. This represents a $0.64 annualized dividend and a yield of 1.8%. The ex-dividend date is Tuesday, September 15th. Worthington Steel's dividend payout ratio (DPR) is 37.65%.

Insiders Place Their Bets

In other Worthington Steel news, insider Clifford Larivey sold 11,105 shares of the business's stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $40.09, for a total transaction of $445,199.45. Following the completion of the transaction, the insider owned 64,308 shares of the company's stock, valued at $2,578,107.72. The trade was a 14.73% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, COO Jeffrey R. Klingler sold 20,036 shares of the company's stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $43.82, for a total transaction of $877,977.52. Following the sale, the chief operating officer owned 93,212 shares of the company's stock, valued at $4,084,549.84. This trade represents a 17.69% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 33,708 shares of company stock valued at $1,431,830 in the last quarter. Insiders own 2.60% of the company's stock.

Institutional Trading of Worthington Steel

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Royal Bank of Canada lifted its holdings in shares of Worthington Steel by 14.8% during the first quarter. Royal Bank of Canada now owns 15,771 shares of the company's stock worth $399,000 after buying an additional 2,038 shares during the last quarter. AQR Capital Management LLC increased its position in Worthington Steel by 89.4% during the first quarter. AQR Capital Management LLC now owns 50,634 shares of the company's stock worth $1,269,000 after acquiring an additional 23,899 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its position in Worthington Steel by 4.5% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 19,346 shares of the company's stock worth $490,000 after acquiring an additional 841 shares during the period. Arrowstreet Capital Limited Partnership acquired a new position in Worthington Steel during the 2nd quarter valued at $670,000. Finally, First Trust Advisors LP raised its stake in Worthington Steel by 3.9% during the 2nd quarter. First Trust Advisors LP now owns 127,877 shares of the company's stock valued at $3,815,000 after purchasing an additional 4,756 shares during the last quarter. Institutional investors and hedge funds own 45.41% of the company's stock.

About Worthington Steel

Worthington Steel NYSE: WS is a leading North American steel processor specializing in the production of flat-rolled, coated and painted sheet and coil products. Operating as a wholly owned subsidiary of Worthington Industries, the company serves a broad range of industries, including construction, automotive, appliance, energy and agricultural equipment. Its core business activities encompass the processing, finishing and distribution of carbon and advanced high-strength steels, aluminum and stainless products to manufacturers across the continent.

The company’s product portfolio includes hot-dip galvanizing, galvannealed, aluminized and pre-painted steel products, as well as cold-rolled and hot-rolled coil.

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