North American Steel Companies Prepare for Earnings Season with HRC Prices Up 17%
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Strong Steel Performance: North American steel equities have risen 17% over the past three months, outperforming the SPDR S&P Metals & Mining ETF's 15% increase, demonstrating market resilience amid a supply-driven rally in Hot Rolled Coil (HRC) prices.
- HRC Margin Expansion: HRC metal margins have expanded over 20% relative to pre-tariff levels, with post-tariff mill utilization approximately 160 basis points above historical norms, indicating the industry's profitability despite weak demand.
- Demand Outlook Uncertainty: While medium and smaller buyers adjust their purchasing strategies due to trade uncertainties, the analyst believes clarity on the USMCA and IEEPA tariffs will be crucial to trigger larger steel-intensive projects.
- Earnings Forecast Adjustments: The analyst expects fourth-quarter results to be weaker due to seasonally lighter shipments, although Nucor may beat expectations; however, unplanned outages at Steel Dynamics and a transformer fire at Sinton could impact first-quarter shipments.
Analyst Views on CMC
Wall Street analysts forecast CMC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CMC is 78.26 USD with a low forecast of 62.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 76.120
Low
62.00
Averages
78.26
High
85.00
Current: 76.120
Low
62.00
Averages
78.26
High
85.00
About CMC
Commercial Metals Company is engaged in offering products and technologies to meet the critical reinforcement needs of the global construction sector. The Company’s solutions support construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation, and transmission. Its segments include North America Steel Group, Europe Steel Group and the Emerging Businesses Group. The North America Steel Group segment provides a diverse offering of products and solutions to support the construction sector. The Europe Steel Group segment is composed of a vertically integrated network of recycling facilities, an EAF mini mill and fabrication operations located in Poland. The Emerging Businesses Group segment's portfolio consists of its construction services products, Tensar products and solutions and its impact metals, and performance reinforcing steel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
