CMC - Macro Issues Loom Over Commercial Metals' Ongoing Self-Help Story

• Commercial Metals posted a solid EBITDA beat (even excluding a one-time credit), with rebounding shipments in North America and improved profitability.
• Continuous improvement seems to be the ongoing operating strategy for the company, with management closing an older plant and starting construction on a new MBQ micro mill.
• Macro issues are my biggest concern; while management sees a strong construction backlog, I believe the non-resi and infrastructure project funnels are thinning out and will be weak in '21-'22.
• A federal infrastructure stimulus bill would be a big help to the near-term outlook.
• The company looks undervalued on my long-term full-cycle EBITDA estimate (including a non-resi downturn), but I'm worried that average estimates/expectations could still be a little high for non-resi.

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