Worthington Steel (NYSE:WS) Shares Gap Down on Disappointing Earnings

Key Points

• Shares gapped down after Q3 results missed expectations — EPS $0.27 vs. $0.47 consensus and revenue $769.8M vs. ~$883M expected, sending the stock from a $35.01 close to a $29.80 open (last traded ≈ $30.63).
• Worthington declared a quarterly dividend of $0.16 per share (ex-dividend June 12, payable June 26), equal to a $0.64 annualized payout and roughly a 2.2% yield with a ~36% payout ratio.
• Analyst coverage is mixed but points to upside: KeyCorp started coverage with an "overweight" $46 price target and the MarketBeat consensus price target is $46 with an overall "Hold" rating.

Worthington Steel, Inc. (NYSE:WS - Get Free Report)'s share price gapped down prior to trading on Thursday following a dissappointing earnings announcement. The stock had previously closed at $35.01, but opened at $29.80. Worthington Steel shares last traded at $30.6340, with a volume of 143,603 shares.

The company reported $0.27 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.47 by ($0.20). Worthington Steel had a return on equity of 10.70% and a net margin of 3.83%.The firm had revenue of $769.80 million during the quarter, compared to the consensus estimate of $882.95 million. During the same quarter in the prior year, the business posted $0.35 EPS. The firm's revenue for the quarter was up 12.0% on a year-over-year basis.

Worthington Steel Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, June 26th. Shareholders of record on Friday, June 12th will be given a dividend of $0.16 per share. The ex-dividend date of this dividend is Friday, June 12th. This represents a $0.64 annualized dividend and a yield of 2.2%. Worthington Steel's dividend payout ratio is presently 35.96%.

Worthington Steel News Summary

Here are the key news stories impacting Worthington Steel this week:

• Positive Sentiment: KeyCorp initiated coverage with an "overweight" rating and a $46 price target, signaling sizable upside versus current levels and potentially supporting buying interest. KeyCorp Coverage
• Positive Sentiment: Worthington declared a quarterly cash dividend of $0.16 per share (payable June 26; record June 12), yielding about 2.1% annually — a shareholder-friendly move that can support the stock's income appeal. Dividend Announcement
• Neutral Sentiment: The company filed its fiscal Q3 results and accompanying release, providing full financial details and management commentary for investors to parse (see below for analyst takeaways). Earnings Press Release
• Negative Sentiment: Q3 results missed expectations: EPS came in at $0.27 vs. a $0.47 consensus and revenue was $769.8M vs. ~$883M expected — a clear earnings and top-line miss that has been cited as the primary driver of intraday weakness. Analyst Note on Miss
• Negative Sentiment: Market coverage flagged the miss and weak margins — media headlines note the stock "tumbled" after the release, reflecting investor reaction to the earnings shortfall. Market Reaction
• Negative Sentiment: Wider market pressure (U.S. futures slipping amid geopolitical headlines) is applying additional downward momentum to cyclicals like steel producers, increasing the chance of further near-term volatility for WS. Market Context

Analysts Set New Price Targets

Several equities analysts have recently commented on the stock. Zacks Research raised shares of Worthington Steel from a "strong sell" rating to a "hold" rating in a research note on Monday, February 16th. KeyCorp began coverage on Worthington Steel in a research note on Wednesday. They issued an "overweight" rating and a $46.00 target price on the stock. Wall Street Zen upgraded Worthington Steel from a "buy" rating to a "strong-buy" rating in a report on Saturday, February 28th. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Worthington Steel in a research report on Wednesday, January 21st. One equities research analyst has rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company has a consensus rating of "Hold" and a consensus price target of $46.00.

Insider Transactions at Worthington Steel

In other news, Director Jon J. Bowsher bought 2,500 shares of Worthington Steel stock in a transaction on Friday, January 30th. The shares were purchased at an average price of $40.15 per share, for a total transaction of $100,375.00. Following the acquisition, the director owned 17,893 shares of the company's stock, valued at approximately $718,403.95. The trade was a 16.24% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Scott J. Kelly bought 7,000 shares of the firm's stock in a transaction dated Tuesday, January 27th. The stock was purchased at an average cost of $39.11 per share, with a total value of $273,770.00. Following the transaction, the director directly owned 16,157 shares in the company, valued at approximately $631,900.27. This represents a 76.44% increase in their position. The SEC filing for this purchase provides additional information. 2.60% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Worthington Steel

Several hedge funds have recently made changes to their positions in WS. Royal Bank of Canada lifted its position in Worthington Steel by 14.8% during the first quarter. Royal Bank of Canada now owns 15,771 shares of the company's stock valued at $399,000 after buying an additional 2,038 shares during the period. AQR Capital Management LLC grew its position in shares of Worthington Steel by 89.4% in the 1st quarter. AQR Capital Management LLC now owns 50,634 shares of the company's stock worth $1,269,000 after buying an additional 23,899 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in shares of Worthington Steel by 4.5% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 19,346 shares of the company's stock worth $490,000 after buying an additional 841 shares during the period. Geode Capital Management LLC increased its stake in shares of Worthington Steel by 0.9% in the 2nd quarter. Geode Capital Management LLC now owns 802,320 shares of the company's stock worth $23,936,000 after acquiring an additional 7,060 shares in the last quarter. Finally, Commonwealth of Pennsylvania Public School Empls Retrmt SYS lifted its position in Worthington Steel by 7.3% during the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 8,989 shares of the company's stock valued at $268,000 after acquiring an additional 608 shares during the period. 45.41% of the stock is currently owned by institutional investors.

Worthington Steel Stock Performance

The company has a debt-to-equity ratio of 0.04, a quick ratio of 1.09 and a current ratio of 1.80. The business's 50-day moving average is $40.19 and its 200-day moving average is $35.62. The company has a market capitalization of $1.51 billion, a PE ratio of 16.71 and a beta of 1.62.

Worthington Steel Company Profile

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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