COMMERCIAL METALS COMPANY (CMC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $67.63, COMMERCIAL METALS COMPANY (CMC) is priced for +0.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/CMC

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

The price is supported by asset-based and relative-multiple and growth-DCF value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Relative, Growth Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.3%); the inversion above states its own rate.

Per-Model Detail (n=12)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Pricing power showed up in the numbers in the quarter ended May 31, 2026: the spread between what North American steel products sold for and what scrap cost widened by 111 dollars a ton against the year-ago quarter, as selling prices rose 130 dollars a ton while scrap rose only 19.
• The risk is that this is the good part of a cycle rather than a new level, and the sequential detail already hints at it, with steel product margins narrowing 13 dollars a ton from the prior quarter as a 28 dollar scrap increase outran a 15 dollar price increase.
• Roughly 600 million dollars of fiscal 2026 capital spending is going into the Berkeley County, West Virginia facilities, and the company has said it now expects to reach its leverage target well ahead of the mid-2027 date it had committed to.

Bull Case

Three claims compete for every dollar this company generates, and how management splits them is the clearest window into the business. The first is a mill. Fiscal 2026 capital spending is set at roughly 600 million dollars, driven by construction at the Berkeley County, West Virginia site, and the 10-K states the intent plainly: We aim to execute a capital allocation strategy that prioritizes both value-accretive growth and competitive cash returns to stockholders. Part of that build was funded with 150 million dollars of tax-exempt bonds issued at par through the West Virginia Economic Development Authority in May 2025, which is a cheaper source of construction money than a corporate bond and one only a manufacturer putting jobs in a specific county can access.

The second claim is the shareholder, and it has been getting larger. Repurchases ran 101.4 million dollars in fiscal 2023, 182.9 million in fiscal 2024 and 198.8 million in fiscal 2025, when the company retired 3,913,560 shares. Over the past four years the share count has come down about 2.3% a year. The third claim is the dividend, and the streak behind it is the part worth pausing on: the payment declared on June 24, 2026 of 20 cents a share was the 247th consecutive quarterly dividend. Sixty-plus years of uninterrupted payments through a commodity cycle is not a yield story. It is evidence about how the balance sheet has been run.

The operating case behind all three is a cost position. CMC melts scrap in electric furnaces close to where the rebar gets used, which means the input is a domestically collected commodity rather than imported ore and coke. In the quarter ended May 31, 2026 the North America Steel Group widened its metal margin by 111 dollars a ton year over year, with selling prices up 130 dollars a ton against scrap costs up 19. Consolidated net sales for the quarter reached 2.483 billion dollars, 22.9% above the prior year, and net earnings of 173.0 million dollars, or 1.55 dollars a diluted share, more than doubled from 0.73 dollars.

The second engine is no longer steel at all. Construction Solutions net sales doubled year over year to 394.6 million dollars, with the recently acquired precast businesses contributing 175.7 million dollars of that segment's revenue. Concrete pipe and precast products sell into the same infrastructure projects as rebar but are priced off local delivery economics rather than off a global commodity, which is exactly the kind of earnings a cyclical steelmaker wants attached to itself. Europe helped too, where a carbon border mechanism implemented this year has pulled demand back toward domestic producers and third-quarter shipments rose 41.2% sequentially. Meanwhile trailing profits cover interest roughly fifteen times over, and the company has said it now sees its net leverage target arriving well ahead of the mid-2027 goal it set.

Bear Case

NUE and STLD are the names that matter here, and both are considerably larger. NUE turned over 34.16 billion dollars of revenue in its trailing year, growing 12.3%; STLD did 19.01 billion, growing 10.4% at a 9.1% operating margin. CMC, at 8.85 billion dollars of trailing revenue, is the smaller player in a business where scale buys scrap-buying leverage, freight optimization and the balance sheet to keep building through a downturn. Both of those competitors have been adding long-product and downstream capacity into the same North American construction demand CMC serves. When new domestic tonnage arrives in a commodity, it does not politely wait for demand to grow into it; it competes on price, and the marginal ton sets the margin for everyone. CLF, which sits on the integrated rather than the scrap-based side of the industry, is currently running a negative operating margin on 18.90 billion dollars of revenue, which is a useful reminder of how quickly this industry punishes a poor cost position.

The company's own risk disclosure names the pressure without hedging, listing excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities among the factors that move its results. It also notes that Uncertainty regarding tariffs has increased uncertainty in the market related to future costs of projects and the availability of materials, which has resulted in some projects not under contract being delayed. A rebar producer's protection is largely trade policy plus freight, and the first of those is a political variable that resets.

Then there is where in the cycle the reported numbers sit. A metal margin that widened 111 dollars a ton year over year is not a permanent gain; it is the arithmetic of selling prices moving faster than scrap. The sequential figures already show the reverse mechanic at work, with steel product margins narrowing 13 dollars a ton as a 28 dollar scrap increase overran a 15 dollar price increase, and North American finished goods shipments falling 1.7% against the prior year. Management attributed the shipment decline to planned mill outages, heavy rainfall in Texas and a deliberate choice of value over volume. Each explanation is plausible. Together they describe a quarter where the price was doing the work and the volume was not.

Which is what makes the valuation demanding rather than cheap. Today's price implies the business grows operating profit roughly 7.6% a year for five years, and the multiple sits in the upper half of its peer range. For a company whose earnings are set by the spread between two commodity prices, a five-year compounding assumption is a strong claim, and the arithmetic behind it is unusually sensitive: a single percentage point of change in the discount rate moves the implied growth requirement by about seven points. That is not a robust foundation. If the metal margin reverts toward its through-cycle level, the earnings the multiple is applied to fall and the multiple itself compresses at the same time, which is the standard way cyclical stocks disappoint people who bought them on trailing numbers.

Valuation

What today's price asks for is straightforward to state and harder to underwrite. It implies company-wide operating profit growing roughly 7.6% a year over a five-year stretch, against a cost of capital near 8.1%, and it places the multiple in the upper half of the range its peers trade in. One detail deserves more weight than the headline: each percentage point of change in the discount rate shifts that implied growth requirement by about seven points. A valuation that sensitive to a single input is a range, not a number, and should be read as one.

The methods disagree less than usual here, and where they land is informative. The asset-value approaches, which start from what the balance sheet holds and add the value of earning more than the cost of equity on it, land essentially on today's price. The one that adds five years of earning a return on equity of about thirteen percent, against a cost of equity nearer nine, on top of a book value of 40.57 dollars a share arrives within a couple of percent of the quote, and Graham's conservative floor, built from trailing earnings of 5.29 dollars and the same book value, does the same. The peer-multiple lens and the forward-growth methods both land above the price. Only the frames that capitalize a single year's cash generation with no growth credited at all land materially below, and for a business whose annual cash flow swings with a commodity spread, that is the least informative of the four.

The peer set splits the company in two, which is appropriate because the business does. On the steel side, STLD earns a 9.1% operating margin on 19.01 billion dollars of revenue and NUE grew 12.3% over its trailing year on 34.16 billion. On the construction-products side, where CMC's precast and ground stabilization businesses now sit, the economics are different in kind: MLM earns a 22.1% operating margin on 6.35 billion dollars and VMC 20.6% on 8.06 billion. CMC's blended profitability sits between those two worlds, and the shift of revenue mix toward the second is the single most consequential thing about the last two years. Steel products remain the largest revenue line at roughly 42% of the total, with downstream products near 29% and raw materials around 17%.

On the balance sheet, trailing profits cover interest roughly fifteen times, liquid assets stand near 560 million dollars, and the share count has fallen about 2.3% a year over four years while the dividend has been paid every quarter for more than six decades. Management stated in June that it has clear visibility to its net leverage target well ahead of the mid-2027 date it had set. None of that makes the price cheap. It makes the downside a question about earnings power at the bottom of a cycle rather than a question about survival, which for a commodity producer is the more useful distinction.

Catalysts

Third quarter fiscal 2026 results, for the period ended May 31, 2026 and reported on June 25, 2026, were the strongest in some time. Net sales of 2,483.2 million dollars rose 22.9% year over year and 16.5% from the prior quarter, and net earnings of 173.0 million dollars, or 1.55 dollars a diluted share, compared with 83.1 million dollars and 0.73 dollars a share a year earlier. The North America Steel Group drove it: metal margins widened 111 dollars a ton against the prior year as selling prices rose 130 dollars a ton and scrap costs rose 19. Downstream backlog volumes stayed above historical averages, with third quarter booking pricing 15.5% higher than a year earlier, which is the clearest forward indicator this business publishes.

Two structural items are now feeding the numbers. The precast acquisitions contributed 175.7 million dollars to Construction Solutions revenue in the quarter, taking that segment's net sales to 394.6 million dollars, roughly double the prior year. In Europe, the EU Carbon Border Adjustment Mechanism implemented earlier this year has pushed demand toward domestic producers, with third quarter steel shipments up 41.2% sequentially, and further EU trade measures took effect on July 1, 2026. Europe also booked a 20.4 million dollar carbon credit in the quarter, which will not repeat in the same form.

Two dated items sit on the calendar. On June 24, 2026 the board declared a quarterly dividend of 20 cents a share, the company's 247th consecutive quarterly payment, payable July 15 to holders of record on July 6. And management said it will lay out its long-term strategy and financial framework at an Investor Day in August 2026. For the fourth quarter, the company pointed to healthy domestic demand and strong backlogs, and to the absence of the roughly 20 million dollar mill outage cost that weighed on the third quarter.

Peer Cohorts (Per Segment, With Filing Citations)

North America Steel Group (reported)

• NUE (NUCOR CORPORATION)
• FY2025 10-K: …long-term service contracts with outside providers. Where economies of scale and regional market conditions warrant, we can also sell excess output from these plants on a merchant basis. As of December 31, 2025, Nucor had 10 industrial gas plants operating, and six others at various stages of commissioning,…
• FY2025 10-K: …Governance 85 Item 11. Executive Compensation 85 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 85 Item 13. Certain Relationships and Related Transactions, and Director Independence 85 Item 14. Principal Accountant Fees and Services 85 PART IV Item 15. Exhibits…
• STLD (Steel Dynamics, Inc.)
• FY2025 10-K: #8203; ​ ​ ​ ​ ​ For the year ended ​ Steel ​ Recycling ​ Fabrication ​ Aluminum ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Operations ​ Operations ​ Operations ​ Operations ​ Other (a) ​ Eliminations ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales - disaggregated revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​…
• FY2025 10-K: …United States and Mexico and being responsible for BlueScope's only North American electric arc furnace flat roll steel mill as President of North Star BlueScope Steel. Mr. Alvarez earned a bachelor's degree in industrial engineering and an MBA from Tecnológico de Monterrey, México. James S. Anderson has been our…
• CLF (CLEVELAND-CLIFFS INC.)
• FY2025 10-K: …stamping and tube-making capabilities. We believe we offer steel products that are stronger, less expensive, have competitive weight savings, are easier to repair and are more environmentally friendly than alternative materials. In addition, recent disruptions in the aluminum supply chain have begun to push auto…
• FY2025 10-K: …requirements. A prime example of our ability to help our customers through research and development occurred during the fourth quarter of 2025 when we successfully completed a production trial in collaboration with a major automotive customer, where our steel was stamped into exposed parts with no defects using the…
• WOR (WORTHINGTON ENTERPRISES, INC)
• FY2025 10-K: Steel, Inc. 8-K 10.2 12/5/2023 10.39 Employee Matters Agreement, dated November 30, 2023, between Worthington Enterprises, Inc. and Worthington Steel, Inc. 8-K 10.3 12/5/2023 10.40 Trademark License Agreement, dated November 30, 2023, between Worthington Enterprises, Inc. and Worthington Steel, Inc. 8-K 10.4 12/5/2023…
• FY2025 10-K: …wor:LongTermSteelSupplyAgreementMember 2024-05-31 0000108516 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccountsPayableMember us-gaap:CommodityContractMember 2024-05-31 0000108516 wor:HaloMember us-gaap:NoncontrollingInterestMember 2023-06-01 2024-05-31 0000108516 srt:RestatementAdjustmentMember…
• RS (RELIANCE, INC.)
• FY2025 10-K: …unfavorable metals demand and/or raw material pricing. ​ ● Industry Leader According to the MSCI reporting of industry tons sold in the U.S., our 2025 tons sold from our U.S. locations represented approximately 17% of the total tons sold by the U.S. metals service center industry compared to approximately 15% for…
• FY2025 10-K: …location averaging approximately two shifts operating at full capacity for a five-day work week. We have the ability to increase our operating capacity significantly without further investment in facilities or equipment if demand levels increase. ​ We leased 75 of our metals service center facilities as of December…
• ATKR (Atkore Inc.)
• FY2025 10-K: …of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure for the construction and industrial markets. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable and installation…
• FY2025 10-K: …assets was adjusted to the new fair value. This resulted in the elimination of previously accumulated depreciation of $ 14,965 , as well as an equivalent reduction in gross fixed assets. 89 13. GOODWILL AND INTANGIBLE ASSETS Goodwill - C hanges in the carrying amount of goodwill are as follows: Segment (in thousands)…

Emerging Businesses Group (reported)

• WMS (ADVANCED DRAINAGE SYSTEMS, INC.)
• FY2025 10-K: 4-04-01 2025-03-31 0001604028 wms:OtherGeneralInsuranceProgramsMember 2023-04-01 2024-03-31 0001604028 wms:OtherGeneralInsuranceProgramsMember 2022-04-01 2023-03-31 0001604028 wms:FergusonEnterprisesAndCoreAndMainMember us-gaap:SalesRevenueNetMember 2024-04-01 2025-03-31 0001604028…
• FY2025 10-K: …2022-04-01 2023-03-31 0001604028 us-gaap:ReportableSegmentAggregationBeforeOtherOperatingSegmentMember 2022-04-01 2023-03-31 0001604028 us-gaap:OperatingSegmentsMember wms:AlliedProductsAndOtherBusinessSegmentsMember 2022-04-01 2023-03-31 0001604028 us-gaap:IntersegmentEliminationMember…
• EXP (EAGLE MATERIALS INC.)
• FY2025 10-K: …☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate…
• FY2025 10-K: …in interest rates on these outstanding borrowings would increase our interest expense by $5.0 million on an annual basis. At present, we do not utilize derivative financial instruments. We are subject to commodity risk with respect to price changes principally in coal, petroleum coke, natural gas, and power. We…
• MLM (MARTIN MARIETTA MATERIALS INC)
• FY2025 10-K: …for 76% of the Building Materials business' revenues from continuing operations in 2025. The Building Materials business is accordingly affected from time to time by the economies in these regions and has been adversely affected in part by episodic recessions and weaknesses in these economies and may be affected by…
• FY2025 10-K: …strength. For 2025, the Company achieved a company-wide Lost-Time Incident Rate (LTIR) of 0.17, the ninth consecutive year of world-class or better LTIR thresholds, and a company-wide Total Injury Incident Rate (TIIR) of 0.69, the fifth consecutive year of world-class or better TIIR thresholds. BUSINESS ENVIRONMENT…
• VMC (VULCAN MATERIALS COMPANY)
• FY2025 10-K: …as a protected habitat for endangered or sensitive species. Designation as a conservation bank allows us to generate revenue by selling mitigation credits for third party impacts to endangered or sensitive species or to utilize those credits for our impacts. Our engagement with state, regional and local governments…
• FY2025 10-K: …disposal, as well as related offsite investigations and cleanups. We are also involved in several other complex, non-environmental, legal proceedings. As required by GAAP, we establish reserves when a loss is determined to be probable and the amount can be reasonably estimated. Our assessment of probability and loss…
• AMRZ (Amrize Ltd)
• FY2025 10-K: …execution of our ASPIRE program to accelerate synergies and profitable growth and by investing in streamlining our network. Over time, we expect continued growth in demand due to rapid urbanization, aging infrastructure, recent onshoring trends, population growth and historical underinvestment in residential housing.…
• FY2025 10-K: …building lifecycle. • Deeply embedded performance culture and dedication to employee safety: Our performance-based culture drives customer-focused decision-making and superior financial performance, while maintaining a rigorous commitment to protecting the health and safety of our people. • Value accretive and…

Europe Steel Group (reported)

• NUE (NUCOR CORPORATION)
• FY2025 10-K: …metal panels, steel racking for warehouse systems and data centers, overhead doors, and utility towers and structures for communications and energy transmission. The steel products segment also includes our piling distributor. Our capabilities in insulated metal panels, steel racking, overhead doors and towers and…
• FY2025 10-K: …for finished steel products, unfinished steel products and raw materials. These markets are highly competitive with many domestic and foreign firms participating, and, as a result of this highly competitive environment, we find that we primarily compete on price and service. In our steel mills segment, our EAF steel…
• STLD (Steel Dynamics, Inc.)
• FY2025 10-K: …developing solutions for our teammates, customers, suppliers, and other stakeholders, as well as finding ways to operate with fewer resources and less environmental impact. The consistent execution of our six strategic pillars drives our long-term success and sustainability. ​ ● Health & Safety - Safety is our…
• FY2025 10-K: …results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, and segment operating results for 2024 as compared to 2023. ​ 38 Table of Contents Segment Operating Results ( dollars in thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​…
• TS (Tenaris SA)
• FY2025 20-F: United Kingdom. We also have coating facilities in Norway and Italy. Italy Our principal manufacturing facility in Europe is an integrated plant located in the town of Dalmine, in the industrial area of Bergamo, about 40 kilometers from Milan in northern Italy. Situated on an area of 150 hectares, the plant includes a…
• FY2025 20-F: …local infrastructure and resources. 106 Annual Report 2025 EAF producer 107 Annual Report 2025 All our steel is produced in EAFs using recycled steel scrap as the primary source of metallic feedstock. We supplement the use of steel scrap with metallics such as pig iron, direct reduced iron ("DRI"), and ferroalloys to…
• TX (TERNIUM S.A.)
• FY2025 20-F: …any, is commercialized to third parties. Competition Steel The steel industry operates predominantly on a regional basis, with large industry participants selling the bulk of their steel production in their home countries or regions, where they have natural advantages and are able to more effectively market…
• FY2025 20-F: …of Operations." The prices of our steel products generally reflect international market prices for similar products adjusted to reflect regional conditions. We adjust prices for our products periodically in response to changes in the import prices of foreign steel, export prices, and supply and demand. For further…
• CLF (CLEVELAND-CLIFFS INC.)
• FY2025 10-K: …stamping and tube-making capabilities. We believe we offer steel products that are stronger, less expensive, have competitive weight savings, are easier to repair and are more environmentally friendly than alternative materials. In addition, recent disruptions in the aluminum supply chain have begun to push auto…
• FY2025 10-K: …scrap. This access is critical, because prime scrap demand is expected to grow as new flat-rolled EAF capacity has started to come online and is expected to increase in the coming years. FPT includes 21 facilities that are primarily located in the Midwest near our steel facilities. Additionally, our access to scrap…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.