Key insights
- Morgan Stanley and UBS raised price targets for Commercial Metals (CMC), citing strong spread outlooks and stabilizing import pressures in rebar pricing. While some analysts see the stock as fairly valued or overvalued, the consensus points to potential earnings growth and improved free cash flow. The removal of M&A overhang and focus on de-leveraging are also positive factors, suggesting a cautiously optimistic near-term outlook for the company and potentially related construction/materials sectors.
Investing.com - Morgan Stanley raised its price target on Commercial Metals Company (NYSE:CMC) to $83 from $75 while maintaining an Overweight rating. The stock currently trades at $76.98, approaching the new target, and has delivered a remarkable 65% return over the past year.
Analyst Carlos De Alba cited the company’s position to benefit from wide spreads in long products that should lead to material earnings growth. According to InvestingPro data, net income is expected to grow this year, supporting the analyst’s optimistic outlook. The company also maintains a "GOOD" financial health score of 2.9.
The firm noted the removal of Commercial Metals’ M&A overhang following recent acquisitions in the precast concrete space.
Morgan Stanley expects the company to focus on de-leveraging in 2026, with net debt to EBITDA projected at 2.9x in the second quarter of fiscal 2026.
The firm forecasts Commercial Metals will benefit from a higher free cash flow yield of 9.5% in fiscal year 2027. However, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. Investors can access the comprehensive Pro Research Report for CMC, one of 1,400+ US equities covered with expert analysis and actionable intelligence.
In other recent news, UBS upgraded Commercial Metals Company to a Buy rating from Neutral, increasing its price target to $89 from $79. This change comes amid reduced risks to U.S. rebar pricing, as import pressure appears to be stabilizing. Barclays initiated coverage on Commercial Metals with an Equalweight rating and a price target of $75, noting that the company’s shares are fairly valued given its position in the construction cycle and leverage. KeyBanc reiterated a Sector Weight rating on Commercial Metals, maintaining its fiscal 2026 EBITDA estimate but lowering its earnings per share forecast due to higher merger and acquisition-related expenses.
In a separate development, Cielo Waste Solutions completed the acquisition of project development and evaluation assets from CDL Biofuels Ltd. These assets, which include databases and technical reviews related to renewable fuels, will be integrated into Cielo’s Nexus Platform. Additionally, CMC announced the appointment of Michael Dumais to its board of directors, effective June 23, 2026. Dumais brings over 30 years of experience in industrial operations and corporate strategy, having previously served as Executive Vice President at Raytheon Technologies Corporation.
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