Clarksons Platou Upgrades Commercial Metals Company (CMC) to Neutral (Earlier)

Clarksons Platou upgraded Commercial Metals Company (NYSE: CMC) from Sell to Neutral with a price target of $18.00 (from $16.00).

Analyst Lee McMillan commented, "We are upgrading shares of CMC to Neutral from Sell and raising our price target to $18 (from $16) ahead of a rebar trade case ruling that could come next week. Together, the three named countries made up ~1.7 mm of the ~1.9 mm tons of rebar imported into the U.S. in 2016. We estimate the market for rebar production in the U.S. at roughly 6 mm tons, meaning that a successful ruling could eliminate roughly 20% of the rebar supply that was available for 2016. Thus, high import duties stand to have a significant impact on the supply demand balance for rebar in the short run, although longer-term we think the consolidated nature of the filing makes the market particularly susceptible to
replacement tonnage from other countries. In addition, while we believe Street EBITDA estimates (for 2018 in particular) are too high, and that they must be pricing in an affirmative outcome already, we are still mindful of the sharp squeezes in the steel space of late and think an upgrade to Neutral is prudent."

For an analyst ratings summary and ratings history on Commercial Metals Company click here. For more ratings news on Commercial Metals Company click here.

Shares of Commercial Metals Company closed at $22.20 yesterday.

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