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Investing.com - Morgan Stanley (NYSE:MS) maintained its Equalweight rating and $53.00 price target on Commercial Metals Company (NYSE:CMC), currently valued at $5.5 billion, following the company's third-quarter results. According to InvestingPro analysis, the company appears fairly valued based on its current Fair Value assessment.
Commercial Metals reported revenue of $2,020 million for the third quarter of 2025, slightly below the Visible Alpha consensus of $2,047 million but ahead of Morgan Stanley's estimate of $2,010 million. The company's core EBITDA came in at $204 million, missing the consensus expectation of $221 million and falling short of the firm's estimate of $216 million. InvestingPro data shows the company maintains a strong financial health score of 2.74 (GOOD), with liquid assets exceeding short-term obligations.
The North America segment posted EBITDA of $186 million, below consensus estimates of $205 million, with average selling prices of $859 per short ton and shipment volumes of 798,000 tons. The European steel segment delivered EBITDA of $4 million with shipments of 359,000 tons, exceeding volume expectations despite lower-than-anticipated selling prices of $663 per short ton.
Cash from operations reached $154 million, surpassing both the consensus estimate of $145 million and significantly exceeding Morgan Stanley's projection of $21 million. The Engineering and Building Group (EBG) contributed revenue of $197 million and EBITDA of $41 million, both figures coming in above consensus expectations. Notably, InvestingPro data reveals the company offers a 1.48% dividend yield and has maintained dividend payments for 55 consecutive years. Get access to 10+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
Management expects fourth-quarter results to improve sequentially despite typical seasonal declines in steel shipments, citing higher margins over scrap costs. The European segment is anticipated to benefit from improved market fundamentals and a $28 million CO2 credit, with a second tranche expected in the first quarter of fiscal year 2026. The company trades at a P/E ratio of 70.01, with a strong free cash flow yield of 8%.
In other recent news, Commercial Metals Company reported its third quarter earnings, which fell short of analyst expectations. The company posted adjusted earnings of $0.74 per share, missing the anticipated $0.84 per share. Revenue for the quarter was $2.02 billion, slightly below the consensus estimate of $2.05 billion. Net income also declined to $83.1 million from $119.4 million in the same period last year. Despite these results, the company noted an upward trend in steel product metal margins in North America. CEO Peter Matt highlighted improved financial performance across all segments, driven by better market conditions. The Europe Steel Group surpassed breakeven, benefiting from favorable market fundamentals. Additionally, the company's Transform, Advance, Grow program is outperforming expectations, with initiatives projected to deliver an annual run-rate exceeding $100 million.
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