CMC - Commercial Metals started with Buy at UBS to benefit from infrastructure growth

2023-07-11 15:23:51 ET

Commercial Metals ( NYSE: CMC ) +1.4% in Tuesday's trading as UBS initiated coverage with a Buy rating and $63 price target, citing multi-year domestic rebar shipment growth, sustainable high margins and attractive valuation.

As a pure long steel player and the largest U.S. rebar producer, Commercial Metals ( CMC ) is well positioned to benefit from infrastructure investment growth, according to UBS analyst Cleveland Rueckert, noting rebar intensity for infrastructure projects is 4x-6x higher than for residential buildings and commercial and office buildings.

While rebar consumption may decline in residential and non-residential buildings due to higher near-term interest rates, Rueckert expects infrastructure rebar demand growth, especially in highway projects, to more than offset those declines.

More on Commercial Metals:

• Financial and valuation comparison to sector peers
• Analysis: Commercial Metals: Rock Solid
• Stock price return: Up 13.5% YTD, up 60% in the past 12 months

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