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Commercial Metals Company (CMC)
NYSE:CMC
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Commercial Metals Company
(NYSE:CMC)
Rating:72Outperform
Price Target:
$54.00
▲(10.93%Upside)
Positive Factors
Earnings Growth
3Q FY25 earnings are expected to increase, largely due to rising North American shipments and margins.
Free Cash Flow and Shareholder Returns
CMC is on the cusp of finishing a major capex cycle, leading to improved free cash flow generation and shareholder returns.
Profitability Initiatives
The company is focused on high-margin, early-stage construction markets, with initiatives like TAG aimed at driving sustainably higher profitability.
Negative Factors
Free Cash Flow Challenges
Lower earnings and a seasonal build in working capital led to negative free cash flow for CMC during the quarter.
Market Conditions
Near-term market indicators for its largest exposure in non-residential construction look gloomy, affected by uncertain macro outlook and high interest rates.
Commercial Metals Company (CMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.54B
Dividend Yield1.47%
Average Volume (3M)867.24K
Price to Earnings (P/E)81.4
Beta (1Y)1.18
Revenue Growth-7.93%
EPS Growth-89.29%
CountryUS
Employees13,178
SectorBasic Materials
Sector Strength66
IndustrySteel
Share Statistics
EPS (TTM)0.26
Shares Outstanding113,000,580
10 Day Avg. Volume916,241
30 Day Avg. Volume867,244
Financial Highlights & Ratios
PEG Ratio-0.28
Price to Book (P/B)1.60
Price to Sales (P/S)0.00
P/FCF Ratio8.94
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit4.80
Enterprise Value/Ebitda1.93
Forecast
1Y Price Target
$53.00Price Target Upside8.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Commercial Metals Company Business Overview & Revenue Model
Company DescriptionCommercial Metals Company (CMC) is a leading global manufacturer, recycler, and fabricator of steel and metal products. The company operates in several sectors, including the manufacturing of rebar, merchant bar, and wire rod products, as well as the recycling of scrap metals. With a strong presence in the construction, infrastructure, and energy sectors, CMC provides essential materials and solutions that support various industries worldwide.
How the Company Makes MoneyCommercial Metals Company generates revenue primarily through the production and sale of steel and metal products. A significant portion of its income comes from its steel manufacturing operations, where it produces rebar, merchant bar, and wire rod for construction and industrial applications. Additionally, CMC operates one of the largest metal recycling facilities in the United States, processing and selling scrap metal to steel mills and foundries. The company also engages in fabrication services, where it processes steel into finished products for specific customer needs. Strategic partnerships and contracts with construction firms, infrastructure projects, and industrial manufacturers further bolster CMC's revenue streams, ensuring a steady demand for its products and services.
Commercial Metals Company Earnings Call Summary
Earnings Call Date:Mar 20, 2025
(Q2-2025)
| % Change Since: 4.28%|
Next Earnings Date:Jun 23, 2025
Earnings Call Sentiment Neutral
While CMC faced challenges such as a decline in net earnings and economic uncertainty affecting its North American Steel Group, the call highlighted significant achievements including record low incident rates, improved performance in the Europe Steel Group, and strong demand in the Emerging Businesses Group. The company's strategic initiatives and anticipated improvements in market conditions suggest a cautiously optimistic outlook.Q2-2025 Updates
Positive Updates
Record Low Incident Rate
CMC achieved a record low incident rate consistent with world-class performance, and the number of OSHA recordable events was the lowest since the second half of fiscal 2018, despite having nearly 4,500 more employees.
Improvement in Europe Steel Group
The Europe Steel Group achieved a breakeven performance, marking an improvement both sequentially and year-over-year when energy cost rebates are excluded.
Strong Demand in Emerging Businesses Group
Profitability for CMC's Emerging Businesses Group increased sequentially and compared to the year-ago period, driven by strong demand for its proprietary corrosion-resistant solutions.
Growing Backlog in North America
CMC experienced the second highest volume of new project awards since late fiscal 2022, leading to a healthy sequential increase in downstream backlog.
Improved Market Conditions and Metal Margins
Improved scrap market conditions and an inflection in long steel price levels indicate a floor in steel product metal margins, with expected expansion heading into the third and fourth quarters.
Negative Updates
Decline in Net Earnings
CMC reported net earnings for the second quarter of $25.5 million, down from $85.8 million in the prior-year period.
Economic Uncertainty Impacting North American Steel Group
Economic uncertainty affected the North American Steel Group, impacting steel pricing and slowing the pace of new construction project awards.
Challenges in Arizona 2 Micro Mill
The Arizona 2 micro mill did not achieve breakeven in the second quarter due to transformer outages and startup issues.
Company Guidance
During the CMC's Fiscal 2025 Second Quarter Earnings Call, the company reported net earnings of $25.5 million, or $0.22 per diluted share, with net sales amounting to $1.8 billion. Adjusted earnings, excluding after-tax charges of $3.9 million, were $29.3 million or $0.26 per diluted share. The North American Steel Group achieved an adjusted EBITDA of $128.8 million, equivalent to $123 per ton of finished steel shipped, despite lower margins over scrap. The Europe Steel Group reported a breakeven performance, showing improvement from the previous year, while the Emerging Businesses Group saw a 31% increase in adjusted EBITDA, reaching $23.5 million. CMC anticipates consolidated financial results to improve in the third quarter of fiscal 2025, with expectations of higher margins over scrap and continued strong demand in North America. The company's strategic growth initiatives, including operational and commercial excellence programs and organic and inorganic growth projects, are expected to drive future value and returns, with anticipated capital expenditures between $550 million and $600 million for fiscal 2025.Commercial Metals Company Financial Statement Overview
Summary
Commercial Metals Company shows strong operational efficiency and a solid balance sheet with low leverage. However, weakened profitability is evident from declining net profit margins and inconsistent revenue growth. Despite strong cash generation, recent declines in free cash flow growth signal potential liquidity risks.Income Statement
The company demonstrates a strong gross profit margin of 35.45% TTM, reflecting efficient cost management in production. However, the net profit margin has declined significantly to 0.95% TTM, indicating increased expenses or reduced revenue. Revenue growth has been inconsistent, with a decline of 10.88% in the latest annual report. The EBIT margin is robust at 24.98% TTM, suggesting good operational efficiency.75
Positive
Balance Sheet
The balance sheet is strong with a low debt-to-equity ratio of 0.30, indicating low leverage and financial stability. Return on equity is modest at 1.82% TTM, showing room for improvement in profitability. The equity ratio stands at 59.99% TTM, suggesting a solid capital structure with a good portion of assets financed by equity.80
Positive
Cash Flow
Operating cash flow to net income ratio is high at 10.87 TTM, reflecting strong cash generation relative to profits. Free cash flow growth is negative at -25.75%, indicating potential challenges in maintaining liquidity. The free cash flow to net income ratio is 5.84 TTM, showing efficient conversion of earnings into cash.70
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.74B | 7.93B | 8.80B | 8.91B | 6.73B | 5.48B | Gross Profit |
| 1.19B | 1.36B | 1.81B | 1.86B | 1.11B | 944.80M | EBIT |
| 510.37M | 693.60M | 1.17B | 1.31B | 600.74M | 441.02M | EBITDA |
| 429.51M | 963.93M | 1.38B | 1.49B | 753.53M | 598.37M | Net Income Common Stockholders |
| 73.13M | 485.49M | 859.76M | 1.22B | 412.87M | 279.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 758.40M | 857.92M | 592.33M | 672.60M | 497.75M | 542.10M | Total Assets |
| 6.69B | 6.82B | 6.64B | 6.24B | 4.64B | 4.08B | Total Debt |
| 1.19B | 1.19B | 1.15B | 1.50B | 1.07B | 1.08B | Net Debt |
| 436.37M | 331.70M | 562.47M | 829.45M | 572.04M | 541.58M | Total Liabilities |
| 2.68B | 2.52B | 2.52B | 2.95B | 2.34B | 2.19B | Stockholders Equity |
| 4.01B | 4.30B | 4.12B | 3.29B | 2.29B | 1.89B |
| Cash Flow | Free Cash Flow | ||||
| 427.20M | 575.44M | 737.44M | 250.32M | 44.31M | 603.59M | Operating Cash Flow |
| 795.15M | 899.71M | 1.34B | 700.31M | 228.47M | 791.20M | Investing Cash Flow |
| -339.69M | -323.00M | -835.23M | -684.72M | -162.13M | -192.94M | Financing Cash Flow |
| -335.95M | -313.76M | -599.48M | 165.31M | -109.39M | -247.79M |
Commercial Metals Company Technical Analysis
Positive
48.68
Price Trends
46.35
Positive
46.90
Positive
50.43
Negative
Market Momentum
0.61
Positive
53.43
Neutral
29.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMC, the sentiment is Positive. The current price of 48.68 is above the 20-day moving average (MA) of 48.52, above the 50-day MA of 46.35, and below the 200-day MA of 50.43, indicating a neutral trend. The MACD of 0.61 indicates Positive momentum. The RSI at 53.43 is Neutral, neither overbought nor oversold. The STOCH value of 29.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CMC.
Commercial Metals Company Risk Analysis
Commercial Metals Company disclosed 36 risk factors in its most recent earnings report. Commercial Metals Company reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Commercial Metals Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $5.80B | 10.40 | 5.86% | 2.87% | -9.33% | -51.03% | |
72 Outperform | $5.54B | 81.45 | 1.78% | 1.47% | -7.93% | -89.29% | |
69 Neutral | $4.51B | 6.67 | 19.79% | ― | -15.93% | 86.43% | |
58 Neutral | $5.91B | 73.52 | -2.75% | 11.95% | -10.20% | -152.18% | |
51 Neutral | $1.99B | -1.26 | -21.11% | 5.30% | 2.92% | -30.46% | |
49 Neutral | $1.95B | ― | -16.28% | 12.34% | -9.84% | -14783.33% |
* Basic Materials Sector Average
Performance Comparison
CMC
Commercial Metals Company
48.68
-5.24
-9.72%
GGB
Gerdau SA
2.86
-0.32
-10.06%
SIM
Grupo Simec SA De CV
26.23
-4.77
-15.39%
SID
Companhia Siderúrgica Nacional
1.43
-0.84
-37.00%
TX
Ternium SA
29.35
-4.35
-12.91%
Commercial Metals Company Corporate Events
Dividends
Commercial Metals Declares Quarterly Dividend for Shareholders
Positive
Jun 18, 2025
On June 18, 2025, Commercial Metals Company announced that its board of directors declared a regular quarterly cash dividend of $0.18 per share, marking the company’s 243rd consecutive quarterly dividend. This dividend will be paid on July 9, 2025, to stockholders recorded by June 30, 2025, reflecting CMC’s continued commitment to shareholder returns.
The most recent analyst rating on (CMC) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Commercial Metals Company stock, see the CMC Stock Forecast page.
Private Placements and Financing
Commercial Metals Closes $150M Bond Sale for Facilities
Neutral
May 15, 2025
On May 15, 2025, Commercial Metals Company announced the closing of a $150 million bond sale, facilitated by the West Virginia Economic Development Authority, to finance the construction of solid waste disposal facilities in Berkeley County, West Virginia. The bonds, which mature in 2055, will bear an interest rate of 4.625% per annum, with CMC responsible for the debt service, including semiannual interest payments and principal repayment upon maturity or earlier redemption.
The most recent analyst rating on (CMC) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Commercial Metals Company stock, see the CMC Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Commercial Metals Prices $150M Bonds for Waste Facilities
Positive
May 6, 2025
On May 6, 2025, Commercial Metals Company announced the pricing of $150 million in Solid Waste Disposal Facility Revenue Bonds, Series 2025, through the West Virginia Economic Development Authority. The proceeds from these bonds will finance the construction of solid waste disposal facilities in Berkeley County, West Virginia, with the bonds maturing in 2055 and bearing an interest rate of 4.625% per annum. This move is expected to impact CMC’s operations by supporting its infrastructure projects and reinforcing its market position in sustainable construction solutions.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.