Group 1 - Commercial Metals Company (CMC) is set to release its earnings results for Q1 on January 8, 2025, with expected earnings of $1.54 per share, a significant increase from $0.78 per share in the same period last year [1] - The consensus estimate for CMC's quarterly revenue is $2.05 billion, up from $1.91 billion a year earlier [1] - CMC announced a quarterly dividend of $0.18 per share on January 5, 2025, and its shares rose by 1.3% to close at $72.69 [2] Group 2 - Wells Fargo analyst Timna Tanners maintained an Overweight rating and raised the price target from $68 to $79 [3] - Jefferies analyst Christopher LeFemina upgraded the stock from Hold to Buy and increased the price target from $70 to $78 [3] - JP Morgan analyst Bill Peterson upgraded the stock from Neutral to Overweight and raised the price target from $64 to $78 [3] - Morgan Stanley analyst Piyush Sood upgraded the stock from Equal-Weight to Overweight and raised the price target from $57.5 to $68 [3] - Goldman Sachs analyst Mike Harris maintained a Buy rating and raised the price target from $69 to $76 [3]

Industry Overview - The Zacks Steel Producers industry is expected to benefit from rising steel prices, driven by a resilient non-residential construction market and recovering automotive demand [1][2] - The industry serves various end-use sectors, including automotive, construction, and energy, with steel being a critical component in manufacturing [3] Steel Price Trends - U.S. steel prices have increased due to tightened supply and higher demand, with benchmark hot-rolled coil (HRC) prices recovering to over $900 per short ton in late 2025 [4] - The recovery in steel prices is attributed to improved demand in construction and automotive sectors, alongside supply constraints from plant outages [4] Demand Dynamics - The automotive sector, a significant market for steel, is expected to rebound due to the rise of electric vehicles and government initiatives for carbon neutrality [5] - Non-residential construction demand remains strong, supported by infrastructure projects in the U.S. [5] - However, steel demand in China has softened due to economic slowdown and a decline in the real estate sector, which accounts for about 40% of China's steel consumption [6] Industry Performance - The Zacks Steel Producers industry has outperformed both the S&P 500 and the broader Zacks Basic Materials sector, gaining 48.2% over the past year compared to the S&P 500's 16.9% [9] - The industry currently holds a Zacks Industry Rank of 110, placing it in the top 45% of over 250 Zacks industries, indicating positive near-term prospects [7] Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA ratio of 14.95X, which is below the S&P 500's 18.68X and the sector's 15.04X [12] Company Highlights - **Commercial Metals Company (CMC)**: Expected earnings growth of 125.2% for fiscal 2026, with a strong focus on expanding market presence and implementing price increases [15][16] - **ArcelorMittal (MT)**: Anticipates earnings growth of 45.1% for 2025, focusing on high-value products and maintaining a strong balance sheet [20][21] - **Steel Dynamics (STLD)**: Expected long-term earnings growth of 17.8%, benefiting from capacity expansions and strong customer order activity [24][26] - **Companhia Siderurgica Nacional (SID)**: Expected earnings growth rate of 138.9% for 2025, with upward revisions in earnings estimates due to strong demand in construction [28][29]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Commercial Metals (CMC) - CMC currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [2][3] - The stock has shown a price increase of 0.77% over the past week, compared to a 0.8% increase in the Zacks Steel - Producers industry [5] - Over the last month, CMC's shares have increased by 7.37%, outperforming the industry's 4.67% [5] - In the last quarter, CMC shares have risen by 26.01%, and over the past year, they have gained 46.84%, while the S&P 500 has only increased by 2.39% and 18.18%, respectively [6] Trading Volume - CMC's average 20-day trading volume is 943,032 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, two earnings estimates for CMC have been revised upwards, increasing the consensus estimate from $5.81 to $7.05 [9] - For the next fiscal year, two estimates have also moved higher, with no downward revisions [9] Conclusion - Given the positive momentum indicators and earnings outlook, CMC is positioned as a strong buy candidate with a Momentum Score of B [11]

Geopolitical Developments - The U.S. launched a military strike on Venezuela, extracting President Nicolás Maduro to face criminal charges in the U.S. [2] - President Trump stated that the U.S. would "run" Venezuela until an orderly transition is possible and that U.S. oil companies would rebuild Venezuela's oil infrastructure [2][3] Market Reactions - Investors are expected to closely monitor developments in Venezuela and seek more details from the Trump administration, particularly regarding the oil market, which may experience volatility [3] Employment and Economic Data - The Bureau of Labor Statistics is set to release the December jobs report, which could influence interest rates [6] - Federal Reserve officials indicated that a weakening labor market might lead to more interest rate cuts, with upcoming reports on job openings, private sector hiring, and jobless claims providing insights into the labor market [7] Corporate Earnings Reports - Applied Digital, a data center operator, will report on the AI industry, with investors looking for signals of strong AI spending [9] - Constellation Brands, Tilray Brands, Albertsons Companies, CalMaine Foods, and Simply Good Foods are among the companies reporting earnings this week, providing insights into consumer spending levels [10][11]

Core Viewpoint - Commercial Metals (CMC) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2]. Earnings Estimate Revisions - The trend of rising earnings estimate revisions reflects growing analyst optimism regarding the earnings prospects of Commercial Metals, which is expected to positively influence its stock price [2]. - For the current quarter, the earnings estimate is projected at $1.55 per share, marking a significant increase of +98.7% compared to the same period last year, with a 13.89% rise in consensus estimates over the last 30 days [6]. - For the full year, the expected earnings are $7.05 per share, indicating a year-over-year increase of +125.2%, with one estimate raised and no negative revisions in the past month [7]. Zacks Rank and Performance - Commercial Metals currently holds a Zacks Rank 1 (Strong Buy), which is based on favorable estimate revisions and has historically shown strong performance, with Zacks 1 Ranked stocks averaging a +25% annual return since 2008 [3][8]. - Stocks with Zacks Rank 1 and 2 (Buy) have been shown to significantly outperform the S&P 500 [8]. Stock Performance - The stock has appreciated by 11.7% over the past four weeks due to strong estimate revisions, suggesting potential for further upside [9].

Group 1: Sanmina (SANM) - Sanmina is a global provider of electronics contract manufacturing services [1] - The company has a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 38.9% over the last 60 days [1] - Sanmina has a PEG ratio of 0.64 compared to the industry average of 1.79 [1] - The company possesses a Growth Score of A [1] Group 2: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US [2] - The company has a Zacks Rank 1 (Strong Buy) [2] - The Zacks Consensus Estimate for its current year earnings has increased by 6.9% over the last 60 days [2] - Great Lakes Dredge & Dock has a PEG ratio of 1.02 compared to the industry average of 3.09 [2] - The company possesses a Growth Score of A [2] Group 3: Commercial Metals (CMC) - Commercial Metals manufactures, recycles, and markets steel and metal products [3] - The company has a Zacks Rank 1 (Strong Buy) [3] - The Zacks Consensus Estimate for its current year earnings has increased by 21.3% over the last 60 days [3]

Core Viewpoint - Investors should be cautious when a company diversifies away from its core competencies, but Commercial Metals Company (CMC) may present a unique case [1] Group 1 - The company is recognized for its expertise in its primary business, which raises concerns about its ventures into new areas [1]

Group 1: RenaissanceRe Holdings Ltd. (RNR) - RenaissanceRe Holdings is an insurance and reinsurance company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 27.4% over the last 60 days [1] - The company has a PEG ratio of 1.66, which is lower than the industry average of 1.82, and possesses a Growth Score of B [1] Group 2: Phibro Animal Health Corporation (PAHC) - Phibro Animal Health Corporation operates in the animal health and mineral nutrition sector and holds a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has risen by 9.1% over the last 60 days [2] - The company has a PEG ratio of 1.07, significantly lower than the industry average of 2.68, and has a Growth Score of B [2] Group 3: Commercial Metals Company (CMC) - Commercial Metals Company is involved in steel and metals manufacturing and also carries a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 21.3% over the last 60 days [3] - The company has a PEG ratio of 0.39, which is much lower than the industry average of 1.52, and possesses a Growth Score of B [3]

Core Insights - The Nasdaq has rebounded above its 50-day moving average, indicating bullish sentiment as investors look towards 2026 with a focus on strong earnings growth for the S&P 500 and potential Fed rate cuts [1] - Investors are encouraged to consider stocks that have demonstrated strong performance in 2025, as market conditions are expected to remain favorable [2] Group 1: Stock Screening and Selection - A screening method using the Research Wizard identifies Zacks Rank 1 (Strong Buy) stocks, focusing on those with upward price momentum and trading within 20% of their 52-week highs [3][4] - The screening criteria include a PEG ratio and Price to Sales ratio to ensure value, narrowing down to seven stock picks [4] Group 2: Commercial Metals Company (CMC) - CMC has seen a 40% increase in stock price in 2025, reaching all-time highs and significantly outperforming the S&P 500 over the past 30 years [5][6] - The company operates in the steel industry, primarily recycling scrap metal into new steel products, and is positioned to benefit from ongoing infrastructure spending in the U.S. [6][9] - CMC's earnings estimates for FY26 and FY27 have increased by 21% and 31% respectively, contributing to its Zacks Rank 1 (Strong Buy) status [11] - The company trades at a forward P/E of 10.3X, which is a 34% discount to its sector, indicating potential value for investors [14]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy [3] Group 2: Commercial Metals (CMC) Analysis - CMC has demonstrated significant price momentum with a four-week price change of 21.4% and a 12-week gain of 20.8% [4][5] - The stock has a beta of 1.49, indicating it moves 49% more than the market in either direction, suggesting strong momentum [5] - CMC has a Momentum Score of A, indicating a favorable time to invest [6] - The stock has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investor interest [7] - CMC is trading at a Price-to-Sales ratio of 0.99, indicating it is reasonably valued at 99 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides CMC, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify winning stock picks based on various investing styles [9]