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:
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- Analysis: Commercial Metals: Rock Solid
- Stock price return: Up 13.5% YTD, up 60% in the past 12 months
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Commercial Metals started with Buy at UBS to benefit from infrastructure growth