Buoyed By Better Sentiment, Can Commercial Metals Keep It Going?
Stephen Simpson, CFA
Stephen Simpson, CFA
Several Scenarios Offer Upside To Commercial Metals Co.
Alpha Gen Capital
Alpha Gen Capital
Thu, Jun. 23, 6:52 AM
Wed, Jun. 22, 5:30 PM
Wed, Jun. 22, 9:07 AM
Fri, Jun. 17, 8:57 AM
- Commercial Metals (NYSE:CMC) agrees to sell its remaining steel distribution assets located in Australia for an undisclosed sum to an undisclosed party.
- CMC expects to record a $14M-$16M impairment charge in its FQ3 results from discontinued operations, including the impact of a ~$13.5M accumulated foreign currency translation loss; an earlier statement said the expected impairment charge was $15M-$18M.
Wed, Jun. 8, 10:18 AM
- AK Steel (AKS +10.5%) surges more than 10% as Credit Suisse upgrades shares to Outperform from Neutral with a $7 price target, doubled from $3.50, after the firm increases its U.S. steel price deck.
- Credit Suisse says it remains "very bullish" on the U.S. steel industry, and its new supply/demand model for the U.S. flat rolled market indicates continued deficits for value add sheet into Q3, supporting prices well above fair value levels.
- The firm raises its price targets on all steel stocks in its coverage universe except Commercial Metals (CMC +1.9%), owing to rebar spread risks.
- Steel stocks (SLX +2.8%) are broadly higher in early trading: X +6.8%, MT +3.9%, STLD +3.8%, NUE +2.4%, WOR +1.5%, ZEUS +1.4%.
Thu, Mar. 24, 6:46 AM
Wed, Mar. 23, 5:30 PM
Wed, Mar. 23, 9:10 AM
Mon, Mar. 21, 9:54 AM
- U.S. Steel (X -3.3%) is downgraded to Underperform from Hold with a $10 price target at Jefferies, which says recent gains have been driven by seasonal restocking and gradual demand recovery, but the firm fears momentum may subside into summer.
- Jefferies says U.S. Steel's recent rally is particularly difficult to justify, with shares now trading at 19.3x 2016 and 8.9x 2017 EV/EBITDA vs. the 5.1x historic average; for leverage to near-term price momentum, the firm prefers AK Steel (AKS +1.6%) and would take profits in X.
- Jefferies also downgrades Reliance Steel (RS -1.2%), Commercial Metals (CMC -4.1%) and Olympic Steel (ZEUS -2.3%) to Hold from Buy; the firm's top picks in the space are Steel Dynamics (STLD +0.5%) and Nucor (NUE -0.6%).
Fri, Mar. 11, 11:39 AM
- Credit Suisse is bullish on the U.S. steel sector (SLX +0.6%), believing the U.S. market seems close to a cyclical low point for volume and pricing, with a very strong outlook for both for the rest of 2016.
- Global prices have surged in recent months, and the firm thinks U.S. prices likely will experience the strongest recovery, increasing with the global market and premiums to foreign material likely expanding from trade case protection.
- Credit Suisse initiates U.S. Steel (X +1.8%) with an Outperform rating, expecting the company to generate high incremental margins as volume recovers and seeing 2016 free cash flow and EBITDA beating expectations; X also has the highest leverage to spot market recovery, the firm says.
- However, the firm rates AK Steel (AKS -4.5%) at Underperform, citing the high fixed cost base and Ashland outage as major headwinds; it expects AKS to burn cash at a rate of $43M in 2016 and $109M in 2017.
- Steel Dynamics (STLD +0.7%) also is rated Outperform, while Commercial Metals (CMC -0.1%) and Nucor (NUE +0.3%) are rated Neutral.
Wed, Mar. 2, 2:47 PM
- Steel company shares are soaring following news of U.S. anti-dumping duties in the cold-rolled sheet trade case, with China receiving a 266% duty, which should effectively lock the country out of the U.S. market; Japan and Brazil were nailed with respective duties of 71% and 39%.
- J.P. Morgan analysts call the tariffs a win for U.S. steel stocks including U.S. Steel (X +22%), AK Steel (AKS +17.4%), Steel Dynamics (STLD +5.2%) and Nucor (NUE +2.6%), as trade cases filed by the U.S. and around the world eventually will close the door to the export market for surplus Chinese steel, and China will have to cut its steel capacity to come in line with Chinese domestic demand.
- With steel prices rebounding off of a bottom and the companies clearly demonstrating they have enough liquidity, J.P. Morgan believes the stocks should continue to outperform as shorts find it difficult to portray a possibility of near-term bankruptcies.
- Also: MT +11.7%, CLF +19.5%, CMC +1.2%, WOR +2.9%, ZEUS +13.2%, SLX +6.9%.
Tue, Mar. 1, 7:03 PM
- The U.S. government announces tariffs of 266% on steel imports from China, with goods from Brazil, India, South Korea, Russia, Japan and the U.K. subject to smaller duties.
- It is the second time since December that the U.S. government has penalized foreign steel producers, including Chinese mills, for selling steel in the U.S. at unfairly low prices.
- Analysts say the duties may not fully satisfy U.S. producers, as the 6.9% rate for South Korea, the second-largest source of the products, was far below what the industry alleged.
- Related Tickers: AKS, X, NUE, MT, CMC, STLD, WOR, ZEUS, SLX.
Tue, Jan. 5, 8:56 AM
- Commercial Metals (NYSE:CMC) -0.7% premarket after reporting somewhat disappointing FQ1 results and saying it does not expect market conditions to improve materially over the short term, due to ongoing pressure from steel import activity into the U.S. and continued weakness in the scrap markets.
- CMC says its FQ2 historically has been seasonally slower as a result of holiday slowdowns and winter weather conditions, which reduce construction activities.
- CMC also says the recent passage of comprehensive infrastructure spending legislation marked a significant achievement for future infrastructure in the U.S. but does not expect the new spending provision will translate into steel orders for 12 months or more.
Tue, Jan. 5, 6:49 AM
- Commercial Metals (NYSE:CMC): FQ1 EPS of $0.22 in-line.
- Revenue of $1.15B (-31.5% Y/Y) misses by $210M.
Mon, Jan. 4, 5:30 PM| Mon, Jan. 4, 5:30 PM
Mon, Jan. 4, 9:05 AM
- Commercial Metals (NYSE:CMC) declares $0.12/share quarterly dividend, in line with previous.
- Forward yield 3.51%
- Payable Feb. 2; for shareholders of record Jan. 19; ex-div Jan. 14.
Commercial Metals Co. manufactures, recycles, markets steel and metal products, and related materials and services. The company is organized in five business segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mill and International Marketing and Distribution. The... More
Sector: Basic Materials
Industry: Steel & Iron
Country: United States
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