Commercial Metals Company (NYSE:CMC) Receives Average Recommendation of "Moderate Buy" from Analysts

Key Points

• Analyst sentiment is moderately bullish: Fifteen analysts rate Commercial Metals a consensus “Moderate Buy,” with nine buys and six holds. The average 12-month price target is $81.18 versus a recent price of $67.55.
• Recent financial results exceeded expectations: Commercial Metals reported quarterly EPS of $1.73, topping estimates of $1.70, while revenue rose 22.9% year over year to $2.48 billion.
• Shareholder returns are being supported: The company authorized a $600 million share-repurchase program covering up to 7.5% of outstanding shares and maintains a quarterly dividend of $0.20 per share, yielding about 1.2%.

Commercial Metals Company (NYSE:CMC - Get Free Report) has received an average recommendation of "Moderate Buy" from the fifteen analysts that are currently covering the stock, Marketbeat reports. Six analysts have rated the stock with a hold recommendation and nine have assigned a buy recommendation to the company. The average 12 month price objective among brokers that have covered the stock in the last year is $81.1818.

Several brokerages have issued reports on CMC. Barclays raised their price target on Commercial Metals from $75.00 to $80.00 and gave the company an "equal weight" rating in a report on Friday, August 7th. UBS Group upgraded shares of Commercial Metals from a "neutral" rating to a "buy" rating and upped their price objective for the company from $79.00 to $89.00 in a report on Wednesday, May 13th. Wells Fargo & Company increased their price objective on shares of Commercial Metals from $77.00 to $80.00 and gave the company an "equal weight" rating in a research report on Friday, June 26th. BMO Capital Markets raised their target price on shares of Commercial Metals from $77.00 to $80.00 and gave the stock a "market perform" rating in a research note on Thursday, August 6th. Finally, Citigroup reduced their target price on shares of Commercial Metals from $85.00 to $75.00 and set a "buy" rating for the company in a report on Tuesday, July 7th.

Insider Activity at Commercial Metals

In other news, Director John R. Mcpherson purchased 1,390 shares of Commercial Metals stock in a transaction that occurred on Thursday, August 13th. The stock was acquired at an average cost of $71.92 per share, for a total transaction of $99,968.80. Following the purchase, the director directly owned 21,927 shares of the company's stock, valued at $1,576,989.84. This trade represents a 6.77% increase in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, CEO Peter R. Matt purchased 8,230 shares of Commercial Metals stock in a transaction that occurred on Friday, July 10th. The stock was purchased at an average price of $61.30 per share, with a total value of $504,499.00. Following the completion of the purchase, the chief executive officer directly owned 181,522 shares in the company, valued at $11,127,298.60. This trade represents a 4.75% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 0.62% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Commercial Metals

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Lazard Asset Management LLC grew its stake in shares of Commercial Metals by 0.6% in the fourth quarter. Lazard Asset Management LLC now owns 23,199 shares of the basic materials company's stock valued at $1,606,000 after acquiring an additional 133 shares in the last quarter. NewEdge Advisors LLC increased its position in Commercial Metals by 4.2% during the first quarter. NewEdge Advisors LLC now owns 3,610 shares of the basic materials company's stock worth $222,000 after acquiring an additional 147 shares during the period. Ashton Thomas Private Wealth LLC raised its stake in Commercial Metals by 3.1% in the 4th quarter. Ashton Thomas Private Wealth LLC now owns 4,904 shares of the basic materials company's stock worth $339,000 after purchasing an additional 149 shares in the last quarter. Corient Private Wealth LLC raised its stake in Commercial Metals by 0.7% in the 4th quarter. Corient Private Wealth LLC now owns 23,554 shares of the basic materials company's stock worth $1,630,000 after purchasing an additional 155 shares in the last quarter. Finally, Fifth Third Wealth Advisors LLC boosted its holdings in Commercial Metals by 4.0% in the 1st quarter. Fifth Third Wealth Advisors LLC now owns 4,164 shares of the basic materials company's stock valued at $256,000 after purchasing an additional 160 shares during the period. Institutional investors and hedge funds own 86.90% of the company's stock.

Commercial Metals Price Performance

NYSE:CMC opened at $67.55 on Friday. The company has a quick ratio of 1.54, a current ratio of 2.33 and a debt-to-equity ratio of 0.73. The stock's 50 day moving average price is $68.02 and its two-hundred day moving average price is $69.40. The firm has a market capitalization of $7.47 billion, a price-to-earnings ratio of 12.72, a P/E/G ratio of 0.40 and a beta of 1.52. Commercial Metals has a 12-month low of $53.08 and a 12-month high of $84.87.

Commercial Metals (NYSE:CMC - Get Free Report) last issued its earnings results on Thursday, June 25th. The basic materials company reported $1.73 EPS for the quarter, topping the consensus estimate of $1.70 by $0.03. The company had revenue of $2.48 billion during the quarter, compared to the consensus estimate of $2.40 billion. Commercial Metals had a return on equity of 15.69% and a net margin of 6.72%.The firm's revenue for the quarter was up 22.9% compared to the same quarter last year. During the same period in the previous year, the company posted $0.74 EPS. On average, analysts anticipate that Commercial Metals will post 6.64 earnings per share for the current year.

Commercial Metals announced that its Board of Directors has initiated a share repurchase program on Wednesday, August 5th that permits the company to buyback $600.00 million in shares. This buyback authorization permits the basic materials company to buy up to 7.5% of its stock through open market purchases. Stock buyback programs are typically an indication that the company's leadership believes its stock is undervalued.

Commercial Metals Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, July 15th. Stockholders of record on Monday, July 6th were issued a dividend of $0.20 per share. This represents a $0.80 dividend on an annualized basis and a dividend yield of 1.2%. The ex-dividend date was Monday, July 6th. Commercial Metals's payout ratio is currently 15.07%.

Commercial Metals Company Profile

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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