Core Viewpoint - Commercial Metals (CMC) is positioned as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook and potential for continued stock price appreciation [1][2]. Earnings Estimate Revisions - Analysts are increasingly optimistic about the earnings prospects for Commercial Metals, leading to higher earnings estimates that are expected to positively impact the stock price [2]. - The current quarter's earnings estimate is projected at $1.23 per share, reflecting a year-over-year increase of +57.7%. Over the past 30 days, one estimate has been revised upward, resulting in an 18.27% increase in the Zacks Consensus Estimate [6]. - For the full year, the earnings estimate stands at $5.24 per share, representing a +67.4% change from the previous year. In the last month, two estimates have been revised upward, contributing to a positive consensus trend [7]. Zacks Rank and Performance - Commercial Metals currently holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts on the upward revisions of earnings estimates. This ranking is associated with a historical average annual return of +25% for Zacks 1 Ranked stocks since 2008 [3][8]. - The Zacks Rank system is designed to leverage the correlation between earnings estimate revisions and stock price movements, suggesting that stocks with higher ranks tend to outperform the S&P 500 [8]. Investment Outlook - The stock has appreciated by 8.8% over the past four weeks due to strong estimate revisions, and further upside potential remains, making it a candidate for portfolio addition [9].

Core Insights - Investor sentiment is currently bullish due to strong third-quarter earnings, despite concerns over a government shutdown and economic data blackout [1] - The Federal Reserve has lowered interest rates in response to a deteriorating labor market, creating challenges for retail investors in stock selection [1] Investment Recommendations - Stocks such as Newmont Corporation (NEM), Commercial Metals Company (CMC), and Cenovus Energy Inc. (CVE) are highlighted as potential investment opportunities [2] - Broker recommendations can provide valuable insights, but should not be the sole basis for investment decisions [4] Stock Performance and Projections - Newmont Corporation is expected to see a 60.1% year-over-year increase in earnings for 2025, with a 4.8% upward revision in broker ratings [7] - Commercial Metals Company is projected to experience a 67.4% increase in earnings for fiscal 2026, with an 8.3% upward revision in broker ratings [9] - Cenovus Energy is forecasted to have a 10.7% rise in earnings for 2025, with a 6.3% upward revision in broker ratings [10] Screening Strategy - A screening strategy is proposed to identify potential winners, focusing on stocks with broker rating upgrades of 1% or more, trading above $5, and an average 20-day volume greater than 100,000 [5] - Stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B are suggested for better upside potential [6]

Core Insights - Top Wall Street analysts have revised their outlook on several prominent companies, indicating a shift in market sentiment and potential investment opportunities [1] Group 1: Analyst Ratings Changes - The article highlights changes in analyst ratings, including upgrades, downgrades, and initiations for various stocks [1] - There is a specific focus on IT stocks, suggesting that analysts have particular insights or recommendations for this sector [1]

Group 1 - The article discusses the performance of Commercial Metals Company (NYSE: CMC), indicating that the company's strength is not as robust as previously anticipated [1] - The investment group "Value In Corporate Events" focuses on identifying opportunities in major corporate events such as IPOs, mergers & acquisitions, and earnings reports, providing coverage of 10 significant events monthly [1] - The article emphasizes the importance of actionable ideas for investors, particularly in the context of corporate capital allocation changes [1]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones involves significant challenges and risks [1] Group 1: Company Overview - Commercial Metals (CMC) is highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] - The company is a manufacturer and recycler of steel and metal products, which is currently positioned for strong growth [3] Group 2: Earnings Growth - Historical EPS growth for Commercial Metals is 0.4%, but projected EPS growth for this year is expected to be 59.1%, significantly surpassing the industry average of 40% [4] Group 3: Asset Utilization - Commercial Metals has an asset utilization ratio (sales-to-total-assets ratio) of 1.13, indicating that the company generates $1.13 in sales for every dollar in assets, compared to the industry average of 0.9 [5] Group 4: Sales Growth - The company's sales are projected to grow by 4.8% this year, while the industry average is stagnant at 0% [6] Group 5: Earnings Estimate Revisions - There is a positive trend in earnings estimate revisions for Commercial Metals, with the current-year earnings estimates increasing by 3.8% over the past month [7] Group 6: Investment Positioning - Commercial Metals has achieved a Growth Score of B and a Zacks Rank 1 due to positive earnings estimate revisions, positioning it well for potential outperformance in the market [9]

Core Insights - Commercial Metals Company (CMC) reported Q4 fiscal 2025 earnings per share (EPS) of $1.35, up from 90 cents year-over-year, and adjusted EPS of $1.37, exceeding the Zacks Consensus Estimate of $1.32 [1][9] - Net sales for the quarter reached approximately $2.11 billion, a 5.9% increase year-over-year, surpassing the Zacks Consensus Estimate of $2.04 billion [1][9] - The company announced an agreement to acquire Foley Products Company for $1.84 billion, which will enhance its portfolio in precast applications and position it as the third-largest player in the U.S. [8][10] Financial Performance - The cost of goods sold increased by 2.9% year-over-year to $1.72 billion, while gross profit rose by 21.6% to $393 million [2] - Core EBITDA for Q4 was $291 million, reflecting a 32.9% increase from the previous year [2] - For fiscal 2025, adjusted EPS was $3.13, a 24% decline from $4.13 in fiscal 2024, but still above the Zacks Consensus Estimate of $3.09 [6] Segment Performance - The North America Steel Group generated net sales of $1.62 billion, up from $1.56 billion year-over-year, with adjusted EBITDA of $239 million compared to $203 million [3] - The Europe Steel Group's revenues increased by 18.5% to $263 million, with adjusted EBITDA improving to $39 million from a negative $3.6 million [4] - The Emerging Businesses Group reported net sales of $222 million, up from $195.5 million, with adjusted EBITDA rising by 19.1% [5] Cash Flow and Balance Sheet - CMC's cash and cash equivalents at the end of fiscal 2025 were $1.04 billion, up from $0.86 billion at the end of fiscal 2024 [7] - Long-term debt increased to $1.31 billion from $1.15 billion year-over-year [7] - Cash generated from operating activities was $715 million, down from $899.7 million in the previous fiscal year [7] Future Outlook - CMC anticipates that finished steel shipments in the North America Steel Group will follow normal seasonal trends in Q1 fiscal 2026, with an expected rise in adjusted EBITDA margins [12] - The Emerging Businesses Group is expected to see a sequential decline due to seasonality but an increase year-over-year [13] - Overall, financial results for Q1 fiscal 2026 are projected to align with Q4 results [13] Market Performance - CMC's shares have decreased by 0.5% over the past year, contrasting with the industry's growth of 5.5% [14]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article highlights that users may face blocks if ad-blockers are enabled [1]

Core Insights - Commercial Metals Company (CMC) is a significant player in the steel and metal products industry, focusing on manufacturing and recycling [1] - CMC reported earnings per share (EPS) of $1.37 for the fourth quarter, exceeding the estimated $1.32 and showing a substantial increase from $0.90 in the same quarter last year [2][6] - The company generated revenue of approximately $2.11 billion, slightly below the estimated $2.12 billion, but still representing growth from the previous year's $2 billion [3][6] Financial Performance - The earnings surprise for the quarter was +3.79%, indicating better-than-expected performance [2] - CMC has exceeded revenue estimates three times in the last four quarters, while it has only surpassed consensus EPS estimates once in the same period [3] - The company's price-to-earnings (P/E) ratio is approximately 166.73, indicating a high valuation relative to its earnings [4][6] Financial Health - CMC's price-to-sales ratio stands at about 0.79, suggesting a relatively low valuation compared to its revenue [4] - The debt-to-equity ratio is approximately 0.33, indicating a moderate level of debt relative to equity [5][6] - The current ratio is about 2.86, suggesting strong liquidity and the ability to cover short-term liabilities [5]

Capital Expenditures and Investments - CMC invested approximately 80%, 77%, and 88% of total capital expenditures in the North America Steel Group segment during fiscal years 2025, 2024, and 2023, respectively[22]. - CMC is constructing a fourth EAF micro mill in Berkeley County, West Virginia, expected to begin production in 2026, enhancing capacity for straight-length and spooled rebar[25]. - CMC's fourth micro mill is under construction in Berkeley County, West Virginia, with an expected total investment of $550.0 million to $600.0 million[194]. - The company received $55.0 million in government assistance for the construction of the fourth micro mill, including $50.0 million in 2025[194]. - CMC issued $150.0 million in tax-exempt bonds to partially offset construction costs for facilities in West Virginia[195]. Financial Performance - Net sales for fiscal 2025 were $7,798.5 million, a decrease of $127.5 million, or 2%, compared to $7,925.9 million in 2024[202][203]. - Net earnings dropped to $84.7 million, a decrease of $400.8 million, or 83%, primarily due to a $274 million litigation-related expense[202][204]. - Selling, General and Administrative (SG&A) expenses increased by $31.8 million, or 5%, driven by higher employee-related costs and technology investments[205]. - Interest expense remained stable, with higher capitalized interest from micro mill construction offsetting increased long-term debt costs[206]. - The effective income tax rate decreased to 21.3% from 23.6% in the previous year, mainly due to reduced pre-tax earnings[208]. Operations and Production - The North America Steel Group segment operates 42 scrap metal recycling facilities, processing ferrous and nonferrous scrap metals[23]. - The company operates six EAF mini mills, three EAF micro mills, and one rerolling mill in its North America Steel Group segment[24]. - CMC's fabrication operations consist of 53 facilities, with 49 engaged in general fabrication of reinforcing steel[27]. - The company operates a network of steel mills and fabrication operations strategically located to meet high demand in the U.S. and Europe[41]. - The company has 756 acres of owned recycling facilities and 88 acres of leased facilities, with a total capacity of 5.1 million tons[160]. Sustainability and Environmental Impact - The company emphasizes sustainability, with approximately 98% of its products made from recycled materials[16]. - In 2025, recycled content accounted for approximately 98% of the raw materials used in the company's manufactured finished steel[43]. - The company incurred environmental costs of $58.4 million in 2025, with an additional $4.7 million spent on capital expenditures for environmental projects[56]. - The company is focused on sustainability, helping customers meet their sustainability needs with products like RebarZero and MerchantZero[44]. - Compliance with environmental laws may result in increased capital obligations and operating costs, impacting financial condition[136]. Labor and Workforce - The total headcount as of August 31, 2025, was 12,690 employees, with approximately 11% of North America Steel Group employees belonging to unions[58]. - As of August 31, 2025, 11% of employees in the North America Steel Group, 4% in the Emerging Businesses Group, and 28% in the Europe Steel Group belong to unions, indicating potential labor negotiation risks[81]. - The company has invested in employee training and resources, providing both online and in-person training options, as well as tuition assistance for further education[65]. - The company faces risks related to labor shortages and competition for skilled employees, which could impede operational efficiency and increase costs[81]. Risks and Challenges - The company relies heavily on ferrous scrap as a primary raw material, which is subject to significant price fluctuations that could adversely affect profitability[76]. - CMC's operations are vulnerable to energy disruptions, as they are large consumers of electricity and natural gas, which could impact production and costs[80]. - Inflation could adversely impact CMC's overall cost structure, particularly if price increases cannot be passed on to customers[83]. - The company is exposed to risks associated with the creditworthiness of its customers, which may lead to reduced sales or increased losses from uncollectible accounts due to credit constraints[96]. - The company faces potential disruptions from geopolitical conditions, including conflicts that may lead to volatility in commodity prices and supply chain interruptions[98]. Legal and Compliance Issues - The company has reported a litigation expense of $362.3 million for the year ended August 31, 2025, related to a judgment against it, which could materially affect its liquidity and financial condition[94]. - The company is involved in legal proceedings that could materially affect its financial condition, including antitrust lawsuits with potential damages of approximately $29 million[170]. - The company may face litigation and liability claims that could adversely impact its business and financial condition[93]. - The company has determined that there are no environmental matters to disclose for the period that could result in monetary sanctions of at least $1 million[173]. Strategic Initiatives - CMC plans to pursue strategic acquisitions to enhance growth, including recent agreements to acquire Concrete Pipe & Precast, LLC and Foley Products Company, LLC, which may pose integration challenges[105][106]. - CMC intends to acquire Foley for approximately $1.84 billion, with the transaction expected to close by the end of calendar 2025[190]. - The company launched the Transform, Advance and Grow (TAG) initiative in 2024 to enhance margins and cash flow generation[191]. Market Conditions - The company’s financial results are significantly dependent on economic conditions in key regions such as the U.S., U.K., Central Europe, and China, which could adversely affect demand for its products[89]. - Competition from alternative materials like aluminum and plastics may adversely impact future demand for steel products[112]. - Excess capacity in the steel industry, particularly from foreign producers, could lead to lower domestic steel prices and negatively affect sales and profitability[126]. - Tariffs and trade restrictions may result in reduced economic activity and increased operational costs, potentially impacting demand for the company's products[132]. Cybersecurity - The company has experienced cybersecurity incidents but has not seen a material adverse effect on its operations as of the report date, although future threats may require significant investment in security measures[90]. - The company has engaged a third-party service provider biannually to evaluate its cybersecurity risk management program[157]. - The company has established a cross-functional cyber incident response team (CIRT) to manage cybersecurity threats and incidents[158].

Financial Data and Key Metrics Changes - The company reported net earnings of $151.8 million or $1.35 per diluted share for Q4 2025, compared to $103.9 million or $0.90 per diluted share in the prior year period, representing a significant increase [35] - Adjusted earnings for the quarter totaled $155 million or $1.37 per diluted share, up from $97.4 million or $0.84 per diluted share in the prior year [35] - Consolidated core EBITDA was $291.4 million for 2025, a 33% increase from $219 million in the prior year [37] - The consolidated core EBITDA margin improved to 13.8% compared to 11% in the prior year [38] Business Line Data and Key Metrics Changes - The North American Steel Group generated adjusted EBITDA of $239.4 million for the quarter, with an adjusted EBITDA margin of 14.8%, up from 13% in the previous year [39] - The Emerging Business Group reported Q4 net sales of $221.8 million, a 13.4% year-over-year increase, with adjusted EBITDA of $50.6 million, up 19.1% [40] - The Europe Steel Group reported adjusted EBITDA of $39.1 million for 2025, compared to a loss of $3.6 million in the prior year, with a segment adjusted EBITDA margin of 14.8% [41] Market Data and Key Metrics Changes - Finished steel shipments increased by 3% year-over-year, with rebar shipments growing at a similar rate [39] - The Dodge Momentum Index reached a record high in September, indicating strong future construction activity [26] - The company noted substantial pent-up demand in non-residential markets, supported by over $2 trillion in announced corporate investments [27] Company Strategy and Development Direction - The company is focused on integrating the recently announced acquisitions of Foley Products Company and CPMP to create a large-scale precast platform [5][6] - The strategic entry into precast is expected to enhance the company's financial profile and growth potential, with anticipated annual run rate synergies of $25 million to $30 million of EBITDA by year three [10] - The company aims to drive meaningful and sustainable improvements to margins, earnings, cash flow, and returns on capital while reducing volatility [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook, citing strong construction activity and a favorable supply landscape [25] - The company anticipates continued demand growth in infrastructure, energy generation, and advanced manufacturing, supported by a significant backlog of potential projects [27] - Management expects the first quarter to be strong for the North American Steel Group, but noted seasonal factors may impact other segments [54] Other Important Information - The company modified its method of calculating adjusted EBITDA to exclude unrealized gains and losses from commodity derivatives, providing a more representative view of operating performance [36] - The total consideration for the acquisitions of Foley and CPMP is approximately $2.5 billion, funded through cash on hand and committed bank financing [17] Q&A Session Summary Question: How much of the demand growth is coming from different sectors? - Management indicated strong infrastructure demand driven by the IIJA, with a bullish outlook for non-residential spending due to a large backlog of potential projects [49][50] Question: Why is the first quarter outlook not more positive despite strong current performance? - Management explained that while the North American Steel Group is expected to perform well, the Europe Steel Group will face challenges due to reduced CO2 credits and seasonal maintenance [54][56] Question: Will the focus be on integration and debt reduction after the acquisitions? - Management confirmed that the immediate focus will be on integrating the new assets and reducing debt, with potential for future acquisitions once leverage is back to acceptable levels [61][62] Question: What is the historical growth rate of Foley and its potential for future growth? - Management noted that Foley has a base level of growth related to GDP and additional growth from market share expansion, expecting to grow above GDP levels in the coming years [66] Question: How quickly can CPMP's margins improve to Foley's levels? - Management indicated that margin improvements for CPMP would be achievable over a three to five year horizon, with some quick wins expected [80][81]