Commercial Metals Company (CMC): Jefferies Bullish Outlook Analysis

Now I have comprehensive data. Let me compile a thorough analysis of Jefferies’ bullish outlook on Commercial Metals.

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Jefferies has adopted a

on Commercial Metals Company (NYSE: CMC), upgrading the stock from Hold to Buy and raising the price target from $70 to (with some sources indicating a potential $85 target under different scenarios)[1][2]. This bullish outlook is underpinned by multiple factors spanning company-specific fundamentals, favorable steel industry dynamics, and structural demand drivers from infrastructure spending. As of January 8, 2026, CMC trades at $72.22, representing approximately 17.8% upside to Jefferies’ $85 target and 7.8% upside to the $78 target[0].

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Jefferies analyst

cited several compelling factors driving the upgrade decision:

Factor	Description
Relative Underperformance	CMC had underperformed peers by roughly 5% in recent weeks, creating an attractive entry point[1]
Rebar Pricing Resilience	Continued strength in rebar pricing, a key product category for CMC[1]
Earnings Upgrade Potential	Expected rebar demand to drive earnings upgrades[1]
Compelling Valuation	Stock valuation has become more attractive following recent weakness[1]
Strategic Priorities	Focus on integration of precast concrete acquisitions and West Virginia rebar mill ramp-up[1]

Jefferies’ broader steel sector analysis identifies several tailwinds:

1. Falling Imports
   : Reduced steel imports are tightening domestic supply-demand dynamics
2. Inventory Rationalization
   : Inventories have declined, supporting pricing
3. Tariff Protection
   : Expected maintenance of steel tariffs provides downside protection for U.S. producers
4. Capital Spending Easing
   : Expected moderation in capex spending should boost free cash flow
5. Muted Scrap Prices
   : Lower scrap costs should support margins and enable upside to consensus forecasts

The firm expects U.S. steel producers to experience

as prices stabilize, imports fall, and capital spending eases into 2026[1].

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Commercial Metals delivered strong FY2025 results, demonstrating operational resilience:

Metric	Value	Analysis
Market Cap	$8.01 billion	Large-cap steel producer
Current Price	$72.22	Near 52-week high ($75.03)
P/E Ratio (TTM)	18.32x	Reasonable valuation vs. peers
P/B Ratio (TTM)	1.86x	Below historical averages
ROE	10.54%	Solid return on equity
Net Profit Margin	5.46%	Healthy profitability
Operating Margin	4.87%	Efficient operations
Current Ratio	4.47x	Exceptional liquidity
Quick Ratio	3.70x	Strong short-term position

Quarter	EPS	Revenue	EPS Surprise
Q4 FY2025	$1.37	$2.12B	+1.48%
Q3 FY2025	$0.74	$2.02B	—
Q2 FY2025	$0.26	$1.75B	—

• EPS of $1.37 beat estimates of $1.35
• Revenue of $2.12B exceeded $2.08B expectations
• Consolidated core EBITDA increased
  33% year-over-year
  to $291.4M
• North American Steel Group generated $239.4M in adjusted EBITDA
• Emerging Businesses segment delivered 13.4% sales growth[2]

Balance Sheet Item	August 31, 2025	August 31, 2024
Cash & Equivalents	$1.04B	$858M
Total Current Assets	$3.49B	$3.29B
Total Current Liabilities	$1.26B	$835M
Long-term Debt	$1.31B	$1.15B
Total Stockholders’ Equity	$4.19B	$4.30B

The company’s

indicates exceptional liquidity and financial flexibility[0][3].

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The U.S. steel sector enters 2026 on “firmer ground” with several structural positives:

1. Flat-Rolled Steel Prices
   : Up approximately 10% in the past two months due to falling imports and tightening inventories[1]
2. Data Center Construction
   : Emerging as the strongest demand sector, with spending at seasonally-adjusted annual rate of $41.4B in August 2025, 26% higher than August 2024[4]
3. Infrastructure Spending
   : 60% of IIJA funds remaining to be spent, driving incremental demand[5]

The rebar market presents favorable fundamentals:

Metric	Value
U.S. Rebar Market (2025)	$7.31 billion
U.S. Rebar Market (2026 Forecast)	$7.70 billion
U.S. Market CAGR (2025-2034)	5.25%
Global Rebar Market (2025)	$257.87 billion
Global Market CAGR (2025-2034)	5.75%

• Public infrastructure projects
• Commercial construction
• Industrial facility expansion
• Data center construction (structural steel requirements)

The

provides significant structural support:

• $1.2 trillion
  in funding over five years (signed November 2021)
• 1.5 million tons
  of incremental annual rebar demand at full run rate
• 60% of funds
  still remaining to be spent as of early 2026[5]

CMC is well-positioned to benefit given its:

• Seven electric arc furnace (EAF) mini mills
• Two EAF micro mills
• Extensive fabrication and processing network
• Geographic footprint aligned with infrastructure project locations

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Period	Performance
1 Month	+8.13%
3 Months	+21.71%
6 Months	+38.92%
1 Year	+51.74%
YTD	+0.55%

Indicator	Value	Interpretation
20-Day MA	$71.00	Short-term support
50-Day MA	$64.96	Intermediate support
200-Day MA	$55.08	Long-term trend positive
Beta	1.49	Higher volatility than market
Trend	Sideways/Neutral	Trading range: $71.00-$73.19

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Rating	Count	Percentage
Buy	12	46.2%
Hold	12	46.2%
Sell	2	7.7%

Firm	Rating	Price Target	Recent Action
Jefferies	Buy	$78	Upgrade to Buy (Dec 10, 2025)
Goldman Sachs	Buy	$84	Maintain (Dec 30, 2025)
Wells Fargo	Overweight	$79	Maintain (Dec 15, 2025)
JPMorgan	Overweight	$78	Upgrade (Dec 5, 2025)
Morgan Stanley	Overweight	—	Upgrade (Oct 24, 2025)

$73.00 (+1.1% from current)
$64.00 - $84.00

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CMC’s management has outlined key priorities for 2026:

1. Integration of Precast Concrete Acquisitions
   — Expanding downstream presence
2. West Virginia Rebar Mill Ramp-Up
   — Increasing production capacity
3. Arizona 2 Mill Optimization
   — Delivered first full quarter of positive EBITDA in Q4 2025
4. Margin Enhancement
   — Strategic initiatives targeting improved returns on capital
5. Capital Allocation
   — FY2026 capex projected at $600M with effective tax rate of 4-8%

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Jefferies’ bullish outlook on Commercial Metals is supported by:

• Strong balance sheet with 4.47x current ratio
• Consistent earnings beats (Q4 FY2025 EPS surprise: +1.48%)
• Core EBITDA growth of 33% YoY
• Strategic capacity expansion (Arizona 2, West Virginia mill)
• Precast concrete acquisition strategy

• Rebar pricing resilience
• Falling steel imports supporting domestic pricing
• Data center construction boom
• Infrastructure spending tailwinds (IIJA)
• Expected free cash flow improvement

• Trading at 18.32x P/E — reasonable for fundamentals
• Below historical average P/B (1.86x)
• Price targets of $78-$85 imply 8-18% upside
• Recent underperformance created entry opportunity

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Risk Factor	Description
Beta 1.49	Higher volatility than market
MACD Death Cross	Technical bearish signal
Litigation Exposure	$362M contingent litigation-related loss recorded in FY2025
Steel Price Volatility	Subject to cyclical demand fluctuations
Interest Rate Sensitivity	Higher rates may slow construction activity

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Jefferies’ upgrade of Commercial Metals reflects a confluence of company-specific strengths and favorable industry dynamics. The stock’s recent underperformance created an attractive entry point, while the combination of resilient rebar pricing, strong infrastructure demand, and improving free cash flow prospects supports the bullish outlook. The $78-$85 price target range implies meaningful upside from current levels, with the company’s solid balance sheet and strategic initiatives providing downside protection.

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[1] Yahoo Finance - “Metals & Mining outlook: Nucor remains top pick at Jefferies, CMC upgraded to Buy” (https://finance.yahoo.com/news/metals-mining-outlook-nucor-remains-105114980.html)
[2] Investing.com - CMC Stock Analysis (https://www.investing.com/equities/commercial-metals-comp)
[3] SEC EDGAR - Commercial Metals Company 10-K Filing (https://www.sec.gov/Archives/edgar/data/22444/000002244425000138/cmc-20250831.htm)
[4] Argus Media - “Viewpoint: US flat steel demand hinges on data centers” (https://www.argusmedia.com/en/news-and-insights/latest-market-news/2771030-viewpoint-us-flat-steel-demand-hinges-on-data-centers)
[5] Zacks Investment Research - CMC Equity Research Report (https://advisortools.zacks.com/proxy/ResearchReport/CMC/report?d=20260105)
[6] Nasdaq - “Jefferies Upgrades Commercial Metals (CMC)” (https://www.nasdaq.com/articles/jefferies-upgrades-commercial-metals-cmc)
[0] 金灵API市场数据 (Commercial Metals Company Overview & Technical Analysis)