Commercial Metals Company (CMC:NYE) Analysts see significant upside

STA Research
by: STA Research
Commercial Metals Company

Based on the Commercial Metals Company stock forecasts from 7 analysts, the average analyst target price for Commercial Metals Company is USD 44.86 over the next 12 months. Commercial Metals Company’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Commercial Metals Company is Bearish, which is based on 4 positive signals and 11 negative signals. At the last closing, Commercial Metals Company’s stock price was USD 36.58. Commercial Metals Company’s stock price has changed by -0.56% over the past week, -0.05% over the past month and +19.54% over the last year.

In the United States, Poland, China, and globally, Commercial Metals Company manufactures, recycles, and fabricates steel and metal goods as well as associated products and services. . Irving, Texas serves as the company’s headquarters. It was established in 1915.

 

What we like:

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Low volatility

The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

 

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector

Low Dividend Growth

This stock has shown below median dividend growth in the previous 5 years compared to its sector.

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