Commercial Metals Company (CMC1) AI Stock Analysis

Company Guidance

For fiscal 2027, CMC expects another solid year, with first-quarter North American Steel Group adjusted EBITDA expected to be nearly flat in comparison to the fourth quarter, Construction Solutions Group adjusted EBITDA expected to be down sequentially, and Europe adjusted EBITDA expected to meaningfully increase sequentially, including somewhere between $10 million and $15 million of CO2 credits and higher energy costs of around $10 to $15 a ton. Precast annual run rate EBITDA is expected to reach $240 million to $250 million, although Q1 is expected to be down mid- to high- single digits from Q4; bookings were up 12.6% sequentially, backlog was up roughly 3% versus the prior year and 4% versus Q3, and margins remained at 30%. Fiscal 2027 capital expenditures are expected to decline by nearly $200 million to roughly $400 million, with roughly a quarter associated with growth CapEx, including approximately $100 million for West Virginia, while the ongoing CapEx range is about $50 ish million above $275 million of maintenance spending. West Virginia startup is expected to occur over a 12-month period, reach breakeven after about 6 months, incur $3 million to $5 million of incremental cost in Q1, and produce a little under 200 thousand tons in the current year; CMC expects up to a million tons of merchant shipments, implying about 150 thousand to 200 thousand tons of incremental merchant shipments. Free cash flow and free cash flow conversion are expected to improve in fiscal 27 and again in fiscal 28, the effective tax rate is expected to be approximately 24% for fiscal 2027, and CMC expects to accelerate share repurchases, with approximately $700 million remaining under the authorization.