Worthington Steel, Inc. (WS) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 25 2025
0mins
Should l Buy WS?
Source: SeekingAlpha
Adjusted EBITDA $75.2 million, reflecting disciplined execution in a soft market and year-over-year volume growth.
Earnings per share (EPS) $0.72, up from $0.56 in the prior year quarter, driven by higher gross margin and increased equity earnings.
Net sales $872.9 million, up 5% year-over-year, primarily due to the addition of Sitem and higher direct volume, partially offset by lower selling prices and toll volumes.
Gross margin Increased by $14.8 million year-over-year, primarily due to higher direct material spreads and direct volumes, partially offset by lower toll processing gross margin.
Direct sales volume Increased by 6% year-over-year, with the majority of the increase coming from existing facilities and the addition of Sitem.
Toll processing volumes Decreased by 22% year-over-year due to softer market conditions, facility closure, and customer program changes.
Automotive shipments Increased by 17% year-over-year, driven by new programs and increased volumes for Detroit 3 OEM customers.
Agricultural market shipments Decreased by nearly 50% year-over-year, reflecting continued softness in the agricultural equipment market.
Heavy truck market shipments Decreased by 7% year-over-year, but partially offset by new business in the market.
Free cash flow $34 million outflow, impacted by increases in working capital and $29 million in capital expenditures.
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Analyst Views on WS
Wall Street analysts forecast WS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WS is 39.00 USD with a low forecast of 39.00 USD and a high forecast of 39.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 45.830
Low
39.00
Averages
39.00
High
39.00
Current: 45.830
Low
39.00
Averages
39.00
High
39.00
About WS
Worthington Steel, Inc. is a metal processor that partners with customers to deliver technical and customized solutions. The Company specializes in carbon flat-roll steel processing, electrical steel laminations and tailored-welded solutions. Its value-added processing capabilities include galvanizing, pickling, configured blanking, specialty cold reduction, lightweighting and electrical lamination. The Company operates approximately 38 facilities in seven states and 10 countries. It serves its customers primarily by processing flat-rolled steel coils, which it sources primarily from various North American steel mills, into the precise type, thickness, length, width, shape, and surface quality required by customer specifications. Its steel products include Hot Rolled Steel, cold rolled steel, and galvanized steel. The Company also produces electric motor laminations. The Company serves various end markets, including automotive, heavy truck, agriculture, construction, and energy.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Worthington Steel Launches Tender Offer for Kloeckner & Co
- Offer Announcement: Following approval from BaFin, Worthington Steel GmbH has officially published its voluntary public tender offer for Kloeckner & Co SE, with the acceptance period commencing today and running until March 12, 2026, offering a cash consideration of €11.00 per share, indicating a strong intent to acquire Kloeckner.
- Significant Premium Attracts Investors: The offer price represents a substantial premium of approximately 98% over the three-month volume-weighted average share price as of December 5, 2025, and about 81% over the closing price on the same date, providing Kloeckner shareholders with an attractive opportunity to realize value, likely encouraging positive shareholder response.
- Shareholder Support Bolsters Confidence: Kloeckner's Management and Supervisory Boards have expressed their support for the offer and intend to recommend acceptance after reviewing the offer document, while SWOCTEM GmbH, Kloeckner's largest shareholder, has irrevocably committed to tendering approximately 42% of its shares, further enhancing market confidence in the transaction.
- Potential Dividend Benefits: Shareholders who accept the offer may still benefit from a potential dividend payment for the 2025 financial year, with Kloeckner potentially paying up to €0.20 per share, which not only enhances shareholder return expectations but also adds attractiveness to Worthington Steel's acquisition strategy.
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Micron Technology (MU) to Acquire Taiwanese Chip Fab for $1.8B
- Acquisition Announcement: Micron Technology has announced plans to acquire a chip fabrication site in Taiwan for $1.8 billion in cash, which will enhance its production capabilities in the global semiconductor market, particularly in AI and high-performance computing.
- Market Consolidation: TransDigm has agreed to acquire Jet Parts Engineering and Victor Sierra Aviation Holdings for approximately $2.2 billion in cash, further solidifying its leadership position in the aerospace parts market, which is expected to boost its revenue and market share.
- Steel Industry Restructuring: Worthington Steel announced the acquisition of metal processing firm Kloeckner & Co. for $2.4 billion, which is expected to make it the second-largest steel service center in North America, significantly enhancing its competitive position in the market.
- Potential Merger: Coterra Energy is in talks with Devon Energy about a potential merger, which, if completed, would rank among the largest oil and gas deals in years, potentially reshaping the industry landscape and enhancing the market positions of both companies.
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Worthington Steel (WS) Enters Acquisition Agreement with Kloeckner & Co, Shares Surge 6.9%
- Acquisition Agreement: Worthington Steel Inc has entered into a Business Combination Agreement with Kloeckner & Co, planning a voluntary public offer to acquire all outstanding shares at €11 per share ($12.8), with management support and existing leadership expected to remain post-closing, thereby enhancing the company's market position and future growth potential.
- Stock Surge: Following the acquisition announcement, Worthington Steel's shares jumped 6.9% to $41.43, reflecting positive market expectations and increased investor confidence, which may provide financial support for the company's future developments.
- Industry Dynamics: On the same trading day, Kopin Corp shares rose 17.1% to $3.46, and ImmunityBio Inc shares increased by 17% to $4.62, indicating strong demand in the biotech and manufacturing sectors, potentially creating more investment opportunities for related companies.
- Positive Market Reaction: The overall market showed mixed performance, with the Nasdaq Composite gaining around 100 points, demonstrating continued investor interest and confidence in tech stocks, which may create a favorable market environment for Worthington Steel's acquisition plans.
See More
Worthington Steel (WS) to Acquire Kloeckner & Co at €11 per Share
- Acquisition Agreement: Worthington Steel plans to acquire Kloeckner & Co at €11 per share (approximately $12.8), with a total transaction value of $2.4 billion, targeting completion in the second half of 2026, demonstrating the company's commitment to expansion in the steel industry.
- Shareholder Support: Kloeckner's largest shareholder, SWOCTEM GmbH, holding 42% of shares, has committed to support the acquisition, which requires at least 65% shareholder acceptance, ensuring a smoother transaction process.
- Synergy Potential: The merger is expected to deliver approximately $150 million in annual run-rate synergies, enhancing Worthington's market position in North America and Europe, with a significant boost to earnings per share anticipated in the first full year post-closing.
- Financial Strategy: Worthington Steel will finance the acquisition using cash on hand and new debt, with pro forma net leverage expected to be around 4.0x, aiming to reduce it below 2.5x within 24 months, reflecting the company's focus on financial stability.
See More
Worthington Steel (WS) Acquires Kloeckner & Co. for $2.4B, Creating North America's Second Largest Steel Service Center
- Acquisition Announcement: Worthington Steel has agreed to acquire metal processing firm Kloeckner & Co. for $2.4 billion, positioning itself as North America's second-largest steel service center and significantly enhancing its market presence.
- Scale Expansion: The acquisition is expected to triple Worthington's sales scale to approximately $9.5 billion while maintaining margins above 7%, thereby strengthening the company's financial stability and competitive edge.
- Synergy Generation: Worthington anticipates generating $150 million in actionable annual run-rate synergies, which will directly enhance profitability and substantially increase earnings per share within the first full year post-acquisition.
- Market Reaction: Following the acquisition announcement, Worthington Steel's shares rose 3.2% in after-hours trading, reflecting positive market sentiment and increased investor confidence in the strategic move.
See More
WORTHINGTON STEEL INC - EXPECTED EPS BOOST FROM DEAL IN FIRST YEAR OF OPERATION
Company Overview: Worthington Steel Inc. is expected to be a significant contributor to earnings per share (EPS) within its first year of operation.
Financial Impact: The anticipated deal with Worthington Steel is projected to enhance the company's financial performance significantly.
See More
Worthington Steel Launches Tender Offer for Kloeckner & Co
- Offer Announcement: Following approval from BaFin, Worthington Steel GmbH has officially published its voluntary public tender offer for Kloeckner & Co SE, with the acceptance period commencing today and running until March 12, 2026, offering a cash consideration of €11.00 per share, indicating a strong intent to acquire Kloeckner.
- Significant Premium Attracts Investors: The offer price represents a substantial premium of approximately 98% over the three-month volume-weighted average share price as of December 5, 2025, and about 81% over the closing price on the same date, providing Kloeckner shareholders with an attractive opportunity to realize value, likely encouraging positive shareholder response.
- Shareholder Support Bolsters Confidence: Kloeckner's Management and Supervisory Boards have expressed their support for the offer and intend to recommend acceptance after reviewing the offer document, while SWOCTEM GmbH, Kloeckner's largest shareholder, has irrevocably committed to tendering approximately 42% of its shares, further enhancing market confidence in the transaction.
- Potential Dividend Benefits: Shareholders who accept the offer may still benefit from a potential dividend payment for the 2025 financial year, with Kloeckner potentially paying up to €0.20 per share, which not only enhances shareholder return expectations but also adds attractiveness to Worthington Steel's acquisition strategy.
See More
Micron Technology (MU) to Acquire Taiwanese Chip Fab for $1.8B
- Acquisition Announcement: Micron Technology has announced plans to acquire a chip fabrication site in Taiwan for $1.8 billion in cash, which will enhance its production capabilities in the global semiconductor market, particularly in AI and high-performance computing.
- Market Consolidation: TransDigm has agreed to acquire Jet Parts Engineering and Victor Sierra Aviation Holdings for approximately $2.2 billion in cash, further solidifying its leadership position in the aerospace parts market, which is expected to boost its revenue and market share.
- Steel Industry Restructuring: Worthington Steel announced the acquisition of metal processing firm Kloeckner & Co. for $2.4 billion, which is expected to make it the second-largest steel service center in North America, significantly enhancing its competitive position in the market.
- Potential Merger: Coterra Energy is in talks with Devon Energy about a potential merger, which, if completed, would rank among the largest oil and gas deals in years, potentially reshaping the industry landscape and enhancing the market positions of both companies.
See More
Worthington Steel (WS) Enters Acquisition Agreement with Kloeckner & Co, Shares Surge 6.9%
- Acquisition Agreement: Worthington Steel Inc has entered into a Business Combination Agreement with Kloeckner & Co, planning a voluntary public offer to acquire all outstanding shares at €11 per share ($12.8), with management support and existing leadership expected to remain post-closing, thereby enhancing the company's market position and future growth potential.
- Stock Surge: Following the acquisition announcement, Worthington Steel's shares jumped 6.9% to $41.43, reflecting positive market expectations and increased investor confidence, which may provide financial support for the company's future developments.
- Industry Dynamics: On the same trading day, Kopin Corp shares rose 17.1% to $3.46, and ImmunityBio Inc shares increased by 17% to $4.62, indicating strong demand in the biotech and manufacturing sectors, potentially creating more investment opportunities for related companies.
- Positive Market Reaction: The overall market showed mixed performance, with the Nasdaq Composite gaining around 100 points, demonstrating continued investor interest and confidence in tech stocks, which may create a favorable market environment for Worthington Steel's acquisition plans.
See More
Worthington Steel (WS) to Acquire Kloeckner & Co at €11 per Share
- Acquisition Agreement: Worthington Steel plans to acquire Kloeckner & Co at €11 per share (approximately $12.8), with a total transaction value of $2.4 billion, targeting completion in the second half of 2026, demonstrating the company's commitment to expansion in the steel industry.
- Shareholder Support: Kloeckner's largest shareholder, SWOCTEM GmbH, holding 42% of shares, has committed to support the acquisition, which requires at least 65% shareholder acceptance, ensuring a smoother transaction process.
- Synergy Potential: The merger is expected to deliver approximately $150 million in annual run-rate synergies, enhancing Worthington's market position in North America and Europe, with a significant boost to earnings per share anticipated in the first full year post-closing.
- Financial Strategy: Worthington Steel will finance the acquisition using cash on hand and new debt, with pro forma net leverage expected to be around 4.0x, aiming to reduce it below 2.5x within 24 months, reflecting the company's focus on financial stability.
See More
Worthington Steel (WS) Acquires Kloeckner & Co. for $2.4B, Creating North America's Second Largest Steel Service Center
- Acquisition Announcement: Worthington Steel has agreed to acquire metal processing firm Kloeckner & Co. for $2.4 billion, positioning itself as North America's second-largest steel service center and significantly enhancing its market presence.
- Scale Expansion: The acquisition is expected to triple Worthington's sales scale to approximately $9.5 billion while maintaining margins above 7%, thereby strengthening the company's financial stability and competitive edge.
- Synergy Generation: Worthington anticipates generating $150 million in actionable annual run-rate synergies, which will directly enhance profitability and substantially increase earnings per share within the first full year post-acquisition.
- Market Reaction: Following the acquisition announcement, Worthington Steel's shares rose 3.2% in after-hours trading, reflecting positive market sentiment and increased investor confidence in the strategic move.
See More
WORTHINGTON STEEL INC - EXPECTED EPS BOOST FROM DEAL IN FIRST YEAR OF OPERATION
Company Overview: Worthington Steel Inc. is expected to be a significant contributor to earnings per share (EPS) within its first year of operation.
Financial Impact: The anticipated deal with Worthington Steel is projected to enhance the company's financial performance significantly.
See More
