Street Calls of the Week
Investing.com - Jefferies downgraded Commercial Metals Company (NYSE:CMC) from Buy to Hold on Wednesday, while maintaining a price target of $70.00. According to InvestingPro data, the stock is currently trading near its 52-week high of $64.53, with a notably high P/E ratio of 195.75.
The downgrade comes after CMC’s shares reached a year-to-date high, despite temporarily falling more than 10% following the company’s second acquisition announcement of a precast concrete solutions supplier last week.
Jefferies noted that while these "transformational acquisitions" should be immediately accretive and reduce cash flow cyclicality, they will significantly increase net debt after closing, likely slowing shareholder returns.
The firm expressed a preference for flat-rolled steel prices over rebar prices in the near term, citing seasonality, import impacts, and Federal Reserve rate cuts following rebar’s outperformance this year.
Jefferies highlighted its relative preference for Nucor and Steel Dynamics at current valuations, noting they offer more liquidity and greater benefits from tariffs, while suggesting further mergers and acquisitions in precast concrete remain possible for CMC.
In other recent news, Commercial Metals Company reported its fourth-quarter 2025 earnings, which exceeded Wall Street expectations. The company achieved an earnings per share of $1.37, surpassing the forecasted $1.35. Revenue also came in higher than anticipated, totaling $2.1 billion compared to the projected $2.09 billion. Despite these positive financial results, the company’s stock experienced a decline in pre-market trading. There were no recent updates regarding any mergers or acquisitions involving Commercial Metals. Additionally, no analyst upgrades or downgrades were reported for the company. These developments provide investors with the latest insights into Commercial Metals’ financial performance.
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