Morgan Stanley Issues Pessimistic Forecast for Commercial Metals (NYSE:CMC) Stock Price

Key Points

• Morgan Stanley lowered its Commercial Metals price target from $88 to $84 while maintaining an “overweight” rating, implying approximately 29.3% upside from the prior close.
• Analyst sentiment remains broadly positive: 10 analysts rate CMC a Buy, four a Hold and one a Sell, producing a “Moderate Buy” consensus and an average target of $79.45.
• Commercial Metals exceeded quarterly expectations with adjusted earnings of $2.09 per share versus $1.95 expected and revenue of $2.66 billion; the company also authorized a $600 million share-repurchase program.

Commercial Metals (NYSE:CMC - Get Free Report) had its price target cut by Morgan Stanley from $88.00 to $84.00 in a research report issued to clients and investors on Monday, Benzinga reports. The firm presently has an "overweight" rating on the basic materials company's stock. Morgan Stanley's target price points to a potential upside of 29.33% from the company's previous close.

A number of other equities research analysts also recently issued reports on the stock. Citigroup reduced their price objective on shares of Commercial Metals from $85.00 to $75.00 and set a "buy" rating on the stock in a research note on Tuesday, July 7th. BNP Paribas Exane upgraded Commercial Metals from a "neutral" rating to an "outperform" rating and set a $75.00 target price for the company in a research note on Wednesday, July 8th. JPMorgan Chase & Co. lowered their price target on Commercial Metals from $83.00 to $80.00 and set an "overweight" rating for the company in a report on Friday, October 9th. Weiss Ratings upgraded Commercial Metals from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday. Finally, BMO Capital Markets reaffirmed a "market perform" rating and issued a $73.00 price objective on shares of Commercial Metals in a research note on Monday. Ten equities research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, Commercial Metals presently has an average rating of "Moderate Buy" and an average target price of $79.45.

Commercial Metals Stock Performance

Commercial Metals stock traded down $0.03 during midday trading on Monday, hitting $64.95. The company's stock had a trading volume of 377,096 shares, compared to its average volume of 1,201,636. The company has a 50-day moving average price of $66.80 and a two-hundred day moving average price of $68.35. Commercial Metals has a 1-year low of $55.97 and a 1-year high of $84.87. The company has a market cap of $7.19 billion, a price-to-earnings ratio of 11.08, a PEG ratio of 0.25 and a beta of 1.53. The company has a debt-to-equity ratio of 0.71, a current ratio of 2.34 and a quick ratio of 1.66.

Commercial Metals (NYSE:CMC - Get Free Report) last released its quarterly earnings results on Thursday, October 15th. The basic materials company reported $2.09 earnings per share for the quarter, beating analysts' consensus estimates of $1.95 by $0.14. The company had revenue of $2.66 billion during the quarter, compared to the consensus estimate of $2.56 billion. Commercial Metals had a net margin of 6.98% and a return on equity of 17.00%. The firm's quarterly revenue was up 25.7% on a year-over-year basis. During the same period in the previous year, the business earned $1.37 earnings per share. As a group, sell-side analysts predict that Commercial Metals will post 7.67 earnings per share for the current year.

Commercial Metals declared that its board has initiated a share repurchase program on Wednesday, August 5th that allows the company to buy back $600.00 million in shares. This buyback authorization allows the basic materials company to repurchase up to 7.5% of its stock through open market purchases. Stock buyback programs are generally a sign that the company's management believes its stock is undervalued.

Insider Activity at Commercial Metals

In other news, Director John McPherson purchased 1,390 shares of the business's stock in a transaction on Thursday, August 13th. The shares were acquired at an average price of $71.92 per share, for a total transaction of $99,968.80. Following the completion of the acquisition, the director owned 21,927 shares in the company, valued at approximately $1,576,989.84. The trade was a 6.77% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. 0.62% of the stock is currently owned by corporate insiders.

Institutional Trading of Commercial Metals

A number of hedge funds and other institutional investors have recently bought and sold shares of CMC. California Public Employees Retirement System raised its holdings in Commercial Metals by 11.5% during the 1st quarter. California Public Employees Retirement System now owns 277,877 shares of the basic materials company's stock valued at $17,070,000 after acquiring an additional 28,693 shares during the period. VIRGINIA RETIREMENT SYSTEMS ET Al bought a new position in shares of Commercial Metals in the second quarter worth $2,354,000. Engineers Gate Manager LP bought a new position in shares of Commercial Metals in the second quarter worth $2,620,000. Bank of America Corp DE grew its position in shares of Commercial Metals by 87.4% in the first quarter. Bank of America Corp DE now owns 1,631,213 shares of the basic materials company's stock valued at $100,205,000 after purchasing an additional 760,985 shares in the last quarter. Finally, GSA Capital Partners LLP purchased a new position in shares of Commercial Metals in the second quarter valued at $2,096,000. Institutional investors own 86.90% of the company's stock.

About Commercial Metals

Commercial Metals Company NYSE: CMC is a steel and metals manufacturer, recycler and fabricator headquartered in Irving, Texas. The company produces and sells steel products used in construction, infrastructure and industrial applications, including reinforcing bar, wire rod, merchant bar, structural steel and related products.

CMC operates an integrated recycling and manufacturing model. Its recycling facilities collect and process ferrous and nonferrous scrap metal, which is used as raw material in the company's electric-arc-furnace steel mills.

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