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On Monday, KeyBanc Capital Markets maintained a Sector Weight rating on shares of Commercial Metals Company (NYSE:CMC), citing concerns over rising scrap costs and mark-to-market headwinds. The stock, currently trading at $46.45 and near its 52-week low, has analyst targets ranging from $50.87 to $68, according to InvestingPro data. Analyst Philip Gibbs noted the challenges particularly affecting the company’s second quarter of fiscal year 2025, which he believes will represent the lowest point in CMC’s quarterly performance.
Gibbs pointed out that the anticipated difficulties for the quarter ending in February are due to higher scrap costs and nonferrous recycling issues. Despite these short-term headwinds, KeyBanc raised its fiscal year 2026 earnings estimates for CMC, expecting improvements in the spread within Americas Mills. InvestingPro analysis shows the company maintains strong financial health with a "GOOD" overall score and a comfortable current ratio of 2.76, suggesting robust liquidity despite current challenges.
The Sector Weight rating, according to Gibbs, reflects the assessment that Commercial Metals Company’s shares are currently fairly valued when considering the blended earnings forecast for fiscal years 2025 and 2026. He also mentioned that while CMC is poised to benefit from the U.S. infrastructure bill and its own investments in low-cost capacity over the medium to long term, the outlook is moderated by slower-than-anticipated infrastructure momentum, mixed private sector sentiment, and the introduction of new rebar capacity in the U.S. market in the coming years.
Commercial Metals Company is expected to release its earnings for the second quarter of fiscal year 2025 on March 20. This earnings report will provide investors with a clearer view of the company’s financial performance and the accuracy of KeyBanc’s projections.
In other recent news, Commercial Metals Company (CMC) reported its fiscal Q1 2025 earnings, revealing adjusted earnings per share (EPS) of $0.78, which fell short of the forecasted $0.82. However, the company exceeded revenue expectations, bringing in $1.91 billion compared to the anticipated $1.86 billion. UBS analyst Curt Woodworth upgraded CMC’s stock from Sell to Neutral, citing a more balanced risk/reward profile and adjusted the price target to $54 from $56. Meanwhile, Citi analyst Alexander Hacking maintained a Neutral rating with a $60 price target, noting stable demand for rebar and potential positive effects from infrastructure spending.
Additionally, CMC’s shareholders approved key proposals during the annual meeting, including the election of directors and the ratification of Deloitte & Touche LLP as the independent auditor. Shareholders also supported the executive compensation package, indicating confidence in the company’s governance practices. The company is focusing on maximizing value from its operations and expanding its Emerging Business segment, with recent price increases in the U.S. holding steady.
CMC’s strategic initiatives include the Arizona II micro mill, which achieved record production levels, and expectations for a decline in Q2 2025 results with a recovery anticipated in the latter half of the fiscal year. The company faces challenges such as project delays and market saturation but remains optimistic about future growth opportunities driven by infrastructure investment and construction demand.
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