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Commercial Metals (CMC) Gains But Lags Market: What You Should Know

·2 min read

Commercial Metals (CMC) closed the most recent trading day at $40.36, moving +0.27% from the previous trading session. This change lagged the S&P 500's 0.66% gain on the day. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, lost 0.02%.

Heading into today, shares of the manufacturer and recycler of steel and metal products had lost 6.42% over the past month, lagging the Basic Materials sector's loss of 1.46% and the S&P 500's loss of 3.79% in that time.

Commercial Metals will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.58, up 104.76% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.42 billion, up 19.31% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for Commercial Metals. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Commercial Metals is currently a Zacks Rank #3 (Hold).

In terms of valuation, Commercial Metals is currently trading at a Forward P/E ratio of 6.63. Its industry sports an average Forward P/E of 2.88, so we one might conclude that Commercial Metals is trading at a premium comparatively.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 194, putting it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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