Oct. 19, 2025 at 9:45 AM ET6 min read

Commercial Metals Surges as Citigroup Raises Rating Amid Strategic Moves

Tim BohenAvatar
Written by Tim Bohen Reviewed by Ben Sturgill Fact-checked by Ellis Hobbs

Commercial Metals Company’s stocks have been trading up by 3.67% amid positive market outlook and strategic expansion plans.

Key Highlights

  • Upgraded to “Buy” from “Neutral” by Citigroup, with an increased price target of $65, which bolsters investor confidence and sparks a rise in share value.
  • The acquisition of Foley Products for $1.84 billion in cash promises immediate earnings and cash flow accretion, aiming for substantial EBITDA synergies.
  • Fourth-quarter results showed adjusted EPS of $1.37, beating consensus forecasts, reflecting robust financial health and strategic acquisitions.
  • The strategic focus ahead, including alignment with European Union policies and U.S. construction trends, indicates substantial growth potential.
  • Anticipations for fiscal Q1 to maintain a strong performance driven by strategic initiatives and market conditions.

Materials industry expert:

Analyst sentiment – positive

Market Position & Fundamentals: Commercial Metals Company (CMC) demonstrates a robust market position with a significant revenue footprint of $7.798 billion. Despite a high gross margin of 120.2%, the company faces challenges with a profit margin on total revenues at just 0.48%, reflecting potential inefficiencies or external cost pressures. Notably, CMC maintains a strong balance sheet with financial stability evidenced by a low total debt to equity ratio of 0.33 and strong coverage ratio. However, its high price-to-earnings ratio of 185.1 suggests potentially overvalued stock relative to earnings. Key insights include stable cash flow with an operating cash flow of $315 million, indicative of liquidity to manage short-term liabilities. The company’s return on equity at 16.84% is commendable, enhancing investor confidence.

Technical Analysis & Trading Strategy: Over the recent week, CMC’s stock displayed significant volatility, with closing prices oscillating between $59.50 and $61.90. Despite an upward spike midweek, the momentum failed to sustain above $62, indicating resistance at this level. The closing price of $57.38 on the final trading day marks a bearish trend when observed against the broader price movement. Given this backdrop, a cautious trading strategy would involve shorting positions around the $59-$60 range if prices fail to break above $62 convincingly on increasing volume. Observing strong support around $55, traders can set cover targets just above this level, utilizing stop-loss protocols to mitigate risks at $62 if breached.

Catalysts & Outlook: CMC’s recent strategic move to acquire Foley Products positions the company for enhanced competitive heft, particularly in the U.S. precast sector, with anticipated synergies of $25M-$30M EBITDA expected by year three. The acquisition aligns with CMC’s momentum from a robust fiscal Q4, which outperformed analyst expectations with adjusted EPS at $1.37 and revenue growth to $2.11 billion. Furthermore, the upgrade from Citi to a “buy” reinforces positive sentiment surrounding CMC’s fiscal health and strategic direction. Compared to broader Materials and Steel sector benchmarks, CMC demonstrates a robust growth trajectory bolstered by strategic acquisitions and policy tailwinds. Overall prospects are positive, with immediate resistance around $62 and support at $55, reflective of broader market movements and strategic positioning.

Candlestick Chart

More Breaking News

Weekly Update Oct 13 – Oct 17, 2025: On Sunday, October 19, 2025 Commercial Metals Company stock [NYSE: CMC] is trending up by 3.67%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Commercial Metals Company (CMC) has demonstrated a solid financial footing, as evidenced by its recent fiscal fourth-quarter results where revenue reached $2.11 billion, surpassing the $2.09 billion consensus. This indicates a 5.9% increase in revenue year-over-year, underpinning its strong market positioning. The adjusted earnings per share (EPS) came in at $1.37, outshining the predicted $1.34, highlighting effective operational management and cost control.

The recent acquisition of Foley Products, valued at $1.84 billion, is expected to bolster CMC’s earnings and free cash flow per share immediately. With strategic cost synergies projected to contribute $25 million to $30 million to EBITDA within three years, the acquisition aligns with the company’s focus on enhancing shareholder value. Additionally, net debt to adjusted EBITDA post-acquisition is set at 2.7x, with a target reduction to below 2.0x within 18 months, signaling disciplined fiscal management.

Key ratios reflect a robust financial framework with a total debt-to-equity ratio of 0.33 and strong liquidity indicated by a current ratio of 2.9. The company’s TAG program has been achieving and exceeding its objectives, expected to generate substantial EBITDA benefits going forward. These initiatives underscore CMC’s commitment to value creation and market competitiveness.

Conclusion

Commercial Metals Company stands at a pivotal point. With Citigroup’s vote of confidence and the strategic acquisition of Foley Products, it appears to be on a promising path toward sustained growth and profitability. The company’s strong financial performance, combined with growth-oriented acquisitions, suggests a favorable outlook for traders, enhancing CMC’s reputation as a solid performer in a competitive market landscape. As Tim Bohen, lead trainer with StocksToTrade, says, “The best trades are the ones you can make without emotion. Plan it, then execute it as if it’s routine.” This philosophy resonates with the company’s approach to strategically capturing market opportunities. As current trends and strategic directions take root, CMC is positioned to harness developing opportunities in both existing and new markets.

This is stock news, not investment advice. StocksToTrade News delivers real-time stock market updates tailored to highlight the key catalysts driving short-term price movements. Our coverage is designed for active traders and investors who thrive in fast-moving markets, with a focus on volatile sectors like penny stocks, AI stocks, Robinhood stocks and other momentum plays. From earnings reports and FDA approvals to mergers, new contracts, and unusual trading volume, we break down the events that can spark significant price action.

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