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Commercial Metals (CMC) Gains As Market Dips: What You Should Know

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Commercial Metals (CMC - Free Report) closed at $21.87 in the latest trading session, marking a +0.64% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.48%. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, lost 0.21%.

Coming into today, shares of the manufacturer and recycler of steel and metal products had gained 2.94% in the past month. In that same time, the Basic Materials sector gained 4.93%, while the S&P 500 gained 4.41%.

Wall Street will be looking for positivity from CMC as it approaches its next earnings report date. The company is expected to report EPS of $0.53, down 27.4% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.36 billion, down 1.81% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.87 per share and revenue of $5.38 billion. These totals would mark changes of -29.17% and -1.77%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CMC. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.35% lower. CMC is currently a Zacks Rank #3 (Hold).

In terms of valuation, CMC is currently trading at a Forward P/E ratio of 11.64. For comparison, its industry has an average Forward P/E of 18.49, which means CMC is trading at a discount to the group.

Meanwhile, CMC's PEG ratio is currently 3.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Steel - Producers industry currently had an average PEG ratio of 1.77 as of yesterday's close.

The Steel - Producers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 131, putting it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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