Worthington Steel (WS) is back in focus after its latest Form 10-Q highlighted financial and operational performance tied to automotive demand, the Sitem Group acquisition in Europe, and increased use of AI and technology.

The recent Form 10-Q, the Sitem Group acquisition in Europe and the push into AI supported operations are all landing against a share price of $36.93, with a 90 day share price return of 20.41% and a 1 year total shareholder return of 29.07%. This suggests positive momentum rather than fading enthusiasm for the story so far.

If you are already watching automotive exposed names like Worthington Steel, it could be a good moment to also look across the wider group of auto manufacturers.

With WS trading at $36.93, sitting around 11% below one analyst price target and with a value score of 5 alongside an implied 46% intrinsic discount, the key question is whether this is mispricing or if markets already see the next leg of growth.

Most Popular Narrative: 9.9% Undervalued

At a last close of $36.93 against a narrative fair value of $41, Worthington Steel is framed as having some upside still on the table.

Worthington Steel is poised to benefit from increased demand in the electrical steel market due to AI initiatives, more data centers, and an anticipated annual power demand growth of more than 6% over the next 15 years, which should lead to higher revenues.

Curious how a moderate revenue trajectory, fatter margins and a richer future P/E all combine to support that higher fair value? The full narrative explains the underlying calculations in more detail.

Result: Fair Value of $41 (UNDERVALUED)

However, there are still some watchpoints, including shipment softness in automotive and construction markets, as well as pressure from inventory losses and higher SG&A that could challenge this setup.

Build Your Own Worthington Steel Narrative

If you see the setup differently or simply prefer running the numbers yourself, you can build a custom Worthington Steel view in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Worthington Steel.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.