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Commercial Metals (CMC) Gains As Market Dips: What You Should Know

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  • CMC

Commercial Metals (CMC) closed the most recent trading day at $32.77, moving +1.05% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.08%.

Heading into today, shares of the manufacturer and recycler of steel and metal products had lost 0.09% over the past month, lagging the Basic Materials sector's gain of 4.93% and the S&P 500's gain of 1.68% in that time.

Investors will be hoping for strength from CMC as it approaches its next earnings release, which is expected to be June 17, 2021. On that day, CMC is projected to report earnings of $0.77 per share, which would represent year-over-year growth of 30.51%. Our most recent consensus estimate is calling for quarterly revenue of $1.68 billion, up 24.99% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.67 per share and revenue of $6.17 billion. These totals would mark changes of +1.14% and +12.74%, respectively, from last year.

Any recent changes to analyst estimates for CMC should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 8.83% higher within the past month. CMC is currently a Zacks Rank #2 (Buy).

In terms of valuation, CMC is currently trading at a Forward P/E ratio of 12.15. This valuation marks a premium compared to its industry's average Forward P/E of 7.21.

Investors should also note that CMC has a PEG ratio of 3.56 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Steel - Producers industry currently had an average PEG ratio of 0.55 as of yesterday's close.

The Steel - Producers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 20, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow CMC in the coming trading sessions, be sure to utilize Zacks.com.

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