Commercial Metals Targets $1.8B EBITDA, Expands Construction Solutions Strategy

Key Points

• Commercial Metals targets significant growth by fiscal 2029, including core EBITDA of $1.65 billion to $1.8 billion, free cash flow of $1.4 billion to $1.5 billion and ROIC of 13% to 14.5%. Construction Solutions is expected to exceed 40% of adjusted EBITDA, up from 28% currently.
• The company’s TAG operating program is projected to generate more than $250 million in run-rate EBITDA benefits by fiscal 2026 and over $350 million by fiscal 2027, supported by productivity gains, commercial improvements and capital-spending discipline.
• CMC is expanding beyond traditional steel through precast acquisitions and other construction offerings, while completing its U.S. micro-mill network. The company also increased its share-repurchase authorization by $600 million and plans to balance buybacks with dividends and growth investments.

Commercial Metals NYSE: CMC used its 2026 Investor Day to outline a strategy centered on expanding its early-stage construction offerings, improving operating performance and generating higher cash flow and returns by fiscal 2029.

President and CEO Peter Matt said the company is evolving from a steel-focused business into a diversified supplier of early-stage construction solutions, with more than 90% of its products used from construction planning through structural framing. The company operates North America Steel, Europe Steel and Construction Solutions segments.

CMC reported revenue of $8.8 billion and EBITDA of $1.3 billion, according to Matt. Construction Solutions currently represents 28% of adjusted, or core, EBITDA, and CMC aims to increase that contribution to more than 40% over the next three years, including potential acquisitions not included in its financial targets.

2029 Financial Targets

The company introduced mid-cycle fiscal 2029 targets that assume a stable operating environment, a 25% tariff at the low end of the range and no additional acquisitions. CMC is targeting core EBITDA of $1.65 billion to $1.8 billion, representing a 10% to 13% compound annual growth rate from trailing-12-month EBITDA.

• Core EBITDA of $1.65 billion to $1.8 billion by fiscal 2029.
• Free cash flow, defined as EBITDA less capital expenditures, of $1.4 billion to $1.5 billion.
• Return on invested capital of 13% to 14.5%.
• Construction Solutions EBITDA of about $500 million from existing assets.

CFO Paul Lawrence said the projected free-cash-flow increase would be driven by both earnings growth and the end of the company’s major mill investment cycle. He said CMC expects capital expenditures associated with its West Virginia mill to decline significantly in coming quarters. The company expects the free-cash-flow ramp to begin in fiscal 2027.

Lawrence also said CMC’s board increased its share repurchase authorization by $600 million. The company intends to execute the authorization during the three-year financial-target period while continuing to pay dividends and pursue growth investments.

TAG Program Targets Cost, Commercial Improvements

Senior Vice President of Operational and Commercial Excellence Ty Garrison described CMC’s Transform, Advance, Grow, or TAG, program as an enterprise-wide operating system rather than a one-time cost-cutting initiative. The program is intended to standardize best practices, improve productivity and strengthen commercial discipline.

CMC expects TAG to deliver more than $250 million in gross run-rate EBITDA benefits by the end of fiscal 2026 and more than $350 million by the end of fiscal 2027. Management said approximately $200 million of that amount is expected to represent durable margin improvement after accounting for inflation.

Examples cited by Garrison included a scrap optimization initiative using artificial intelligence and proprietary operational data that has generated more than $20 million in annual run-rate savings. The company also cited fabrication improvements, including increased tons per truckload and improved rebar yield.

Garrison said the company has avoided more than $180 million of capital spending since implementing a more centralized capital-planning process, a new capital-expenditure platform and a capital investment committee.

Steel Network and Construction Solutions Growth

North America Steel Group Senior Vice President Brian Halloran said CMC’s Arizona and West Virginia micro mills will complete the company’s nationwide mill network. Management said it does not expect to need another mill after those projects are fully ramped.

Halloran said the steel business is benefiting from industry consolidation, trade actions and a “value over volume” commercial approach. CMC said trade actions completed or underway address more than 80% of rebar imports over the past five years, representing about 1 million tons. The company also said it expects imports from South Korea to decline in the second half of the year based on the economics of bringing material into the U.S.

CMC is targeting more than $130 million of identified run-rate savings opportunities in its mill operations and more than $30 million of commercial benefits. Halloran said its fabrication initiative, called Fab Full Potential, is designed to double the business’s through-cycle performance through improved execution, standalone returns and risk-management tools.

In Construction Solutions, the company highlighted its recently acquired precast operations, CP&P and Foley Products. Precast Group Senior Vice President Keith Haas said the combined business has 35 plants and leading positions in the Southeast and Mid-Atlantic. CMC expects $30 million to $40 million of gross run-rate synergies from the acquisitions by the end of the third year.

Haas said precast expands CMC’s addressable market by $20 billion and offers a lower-capital-intensity business with durable pricing, higher margins and high cash conversion. The company is pursuing targeted growth investments in Colorado, Florida and the Mid-Atlantic dry-utilities market.

Senior Vice President Mike Doucet said CMC’s Emerging Businesses Group generated $809 million in revenue, up 12% year over year, and adjusted EBITDA of $155 million, up more than 19%. The portfolio includes Tensar geogrid products, corrosion-resistant reinforcing steel and construction services. CMC is commissioning a second geogrid line in Oklahoma and plans to commission a second GalvaBar facility in Tennessee this fall.

Matt said CMC’s focus remains on executing its transformation, using disciplined acquisitions to expand existing early-stage construction capabilities and divesting assets that no longer fit its strategy when market conditions are appropriate.

About Commercial Metals (NYSE:CMC)

Commercial Metals Company NYSE: CMC is a leading global steel and metal recycler, manufacturer and fabricator based in Irving, Texas. The company operates an integrated network of scrap recycling facilities, electric arc furnace steel mills, metal fabrication plants and distribution centers. Through these operations, Commercial Metals collects and processes ferrous scrap to produce finished steel products and provides recycled metal to a variety of end markets.

In its steelmaking segment, CMC uses electric arc furnace technology to transform recycled scrap into reinforcing bar (rebar), merchant bar, coil and structural products.

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