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1. Company Snapshot

1.a. Company Description

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally.The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers.It also manufactures and sells finished long steel products, including rebar, merchant bar, light structural, and other special sections, as well as semi-finished billets for re-rolling and forging applications.


In addition, the company provides fabricated steel products used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles.Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies.The company was founded in 1915 and is headquartered in Irving, Texas.

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1.b. Last Insights on CMC

Commercial Metals Company's recent performance was driven by strong Q1 FY26 results, with revenue and EPS beats, and triple-digit earnings growth. The company's North America margins remained robust, and recent acquisitions, including CP&P and Foley, contributed to growth. The successful launch of the Transform, Advance, and Grow (TAG) program is expected to yield an annualized run-rate EBITDA benefit of $150 million by the end of fiscal 2026. With a consensus rating of "Moderate Buy" from brokerages, investors remain optimistic about the company's prospects.

1.c. Company Highlights

2. Commercial Metals Company's Q1 2026 Earnings: A Strong Start to the Year

Commercial Metals Company reported a robust financial performance for the first quarter of 2026, with net earnings of $1.773 billion or $1.58 per diluted share, and adjusted earnings of $206.2 million or $1.84 per diluted share. The company's consolidated core EBITDA grew by over 50% from a year ago to $316.9 million, with a core EBITDA margin of 14.9%. The actual EPS came in at $1.37, slightly beating estimates of $1.35.

Publication Date: Jan -09

📋 Highlights
  • Strong Core EBITDA Growth:: Consolidated core EBITDA surged 50% YoY to $316.9 million, with a margin of 14.9%.
  • North America Steel Outperformance:: Adjusted EBITDA rose 58% to $293.9 million, driven by higher steel product margins over scrap costs.
  • Construction Solutions Record:: Achieved $39.6 million adjusted EBITDA, up 75% YoY, with a 20% margin (6.6 pts improvement).
  • Acquisitions and Liquidity:: Closed $2.5B acquisitions (CP&P, Foley) with $3B cash balance, net leverage at 2.5x, targeting <2x in 18 months.
  • TAG Program Impact:: Expected $150M annualized EBITDA benefits by 2026, with $50M achieved in 2025 from scrap optimization and yield improvements.

Segment Performance

The North America Steel Group had a strong operational performance, driven by higher margin over scrap cost on steel products, with adjusted EBITDA up 58% from the prior year period to $293.9 million. The Construction Solutions business achieved a record first-quarter adjusted EBITDA, driven by solid execution and supportive market conditions. In contrast, the Europe Steel Group saw softened conditions due to import flows, but expects prices to benefit from the launch of the European Union's carbon border adjustment mechanism (CBAM).

TAG Program and Acquisitions

The company's Transformation and Growth (TAG) program is on track to deliver an annualized run rate EBITDA benefit of $150 million by the end of fiscal 2026. Subsequent to the end of the first quarter, Commercial Metals Company closed on the acquisitions of CP&P and Foley, which are expected to broaden the company's commercial portfolio and enhance its financial profile.

Outlook and Valuation

The company expects a full-year effective tax rate between 5% and 10% for fiscal 2026 and anticipates spending approximately $625 million in total capital expenditures. With a current P/E Ratio of 17.92 and EV/EBITDA of 17.27, the company's valuation appears reasonable, considering its strong financial performance and growth prospects. Analysts estimate next year's revenue growth at 6.8%, indicating a positive outlook for the company's future prospects.

Cash Flow and Leverage

Commercial Metals Company increased its revolving credit facility capacity from $600 million to $1 billion, ensuring a strong liquidity position. The company's net leverage stands at approximately 2.5 times, and it is confident in its ability to return to its net leverage target of below two times within eighteen months.

Operational Highlights

The Arizona 2 (AZ2) steel mill reached profitability on EBITDA in the fourth quarter and is expected to be nicely profitable throughout the year. The downstream backlog continues to see price improvements, with new orders being put in at higher prices. The company's new commercial approach in the fabrication business aims to protect margins through indexation and proper escalation.

3. NewsRoom

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Jennifer Durbin Sells 25,050 Shares of Commercial Metals (NYSE:CMC) Stock

Feb -06

Source: defenseworld.net

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New York State Common Retirement Fund Reduces Position in Commercial Metals Company $CMC

Feb -03

Source: defenseworld.net

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Artemis Buys $104 Million of Commercial Metals Stock in Large New Stake

Feb -02

Source: fool.com

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CMC Financial Group Sells 177k Shares of This "Cash Cow" ETF

Feb -01

Source: fool.com

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Commercial Metals Co. Director Purchases 2k Shares As the Company's Stock Continues to Shine

Jan -31

Source: fool.com

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4 GARP Stocks With Attractive PEG Ratios and Strong Growth Outlooks

Jan -29

Source: zacks.com

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CMC vs. NUE: Which US Steel Giant Is the Better Buy Right Now?

Jan -28

Source: zacks.com

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CMC Named to Corporate Knights' 2026 Global 100 Most Sustainable Corporations

Jan -27

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

North America

Expected Growth: 4.83%

North America's 4.83% growth in Commercial Metals Company is driven by increasing demand for steel products in construction and infrastructure projects, supported by government investments in transportation and energy infrastructure. Additionally, a strong recovery in the automotive sector and growing demand for recycled metals also contribute to this growth.

Europe

Expected Growth: 4.83%

Europe's 4.83% growth for Commercial Metals Company is driven by increasing demand for steel products from the construction and automotive sectors, supported by government infrastructure investments and a rebound in industrial production. Additionally, the region's focus on renewable energy and sustainable infrastructure projects contributes to the growth.

Corporate and Other

Expected Growth: 4.83%

The 4.83% growth in Corporate and Other segment of Commercial Metals Company is driven by increased demand for steel products, strategic acquisitions, and cost savings initiatives. Additionally, the company's focus on operational efficiency, pricing discipline, and investment in growth projects have contributed to the segment's growth.

7. Detailed Products

Rebar

Reinforcing steel bars used to add strength and stability to concrete structures

Merchant Bar

A range of steel products including angles, channels, flats, and rounds

Wire Rod

Steel rod used to manufacture wire products such as nails, screws, and fencing

Recycled Metals

Recycled metals processed from scrap metal, including copper, aluminum, and steel

Fabricated Rebar

Custom-fabricated rebar products for specific construction projects

Steel Fence Posts

Steel posts used for fencing applications in agriculture, construction, and security

8. Commercial Metals Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Commercial Metals Company is medium due to the availability of alternative materials and products that can replace steel and metal products.

Bargaining Power Of Customers

The bargaining power of customers for Commercial Metals Company is low due to the company's diverse customer base and lack of concentration of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Commercial Metals Company is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Commercial Metals Company is low due to the high barriers to entry in the steel and metal products industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Commercial Metals Company is high due to the competitive nature of the steel and metal products industry, with multiple players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.89%
Debt Cost 4.53%
Equity Weight 78.11%
Equity Cost 10.66%
WACC 9.32%
Leverage 28.02%

11. Quality Control: Commercial Metals Company passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NewMarket

A-Score: 6.9/10

Value: 4.5

Growth: 7.2

Quality: 7.2

Yield: 4.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Reliance Steel & Aluminum

A-Score: 5.3/10

Value: 4.7

Growth: 6.1

Quality: 5.6

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Steel Dynamics

A-Score: 5.2/10

Value: 3.5

Growth: 7.1

Quality: 5.1

Yield: 2.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Boise Cascade

A-Score: 5.1/10

Value: 6.9

Growth: 5.8

Quality: 5.4

Yield: 6.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
CMC

A-Score: 4.2/10

Value: 3.6

Growth: 3.8

Quality: 4.5

Yield: 2.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Cleveland-Cliffs

A-Score: 3.8/10

Value: 9.4

Growth: 3.0

Quality: 3.5

Yield: 0.0

Momentum: 4.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

82.99$

Current Price

82.99$

Potential

-0.00%

Expected Cash-Flows