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Research Alert: CFRA Downgrades Opinion On Shares Of Commercial Metals Company To Hold From Buy
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Research Alert: CFRA Downgrades Opinion On Shares Of Commercial Metals Company To Hold From Buy
Jun 23, 2025 10:28 AM

01:10 PM EDT, 06/23/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We decrease our 12-month target by $6 to $50 on an EV/EBITDA of 6.5x our FY 26 (Aug.) EBITDA estimate, above CMC's three-year avg. forward EV/EBITDA of 5.7x, but below the peer avg. of 7.3x. We lower our FY 25 EPS estimate by $0.07 to $2.95 and FY 26 by $0.74 to $3.68. Our three-stage DCF model calculates an intrinsic value of $51, assuming the following inputs: WACC of 8.1%, free cash flow of $110 million in FY 25 and $250 million in FY 26, a stage-two growth rate of 7.4% that lasts from years 3-5, a stage-three growth rate of 3.7%, and a terminal growth rate of 2.5%. We think CMC is a straight-forward way to gain leverage on secular growth in infrastructure, supported by demographic and reshoring trends. We also remain bullish on CMC's cost savings program, which we think is overachieving. Yet, the current pricing environment is pressuring margins and we think a Hold rating is justified in this context, especially given more attractive investments within metals and mining (gold and copper), in our view.

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