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syy891013

Over supply of Steel and Rising Energy Costs

Short
Commercial Metals Company (NYSE:CMC)  
syy891013  
NYSE:CMC   Commercial Metals Company
Fundamental Analysis
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fundamental
Quantitative Analysis

  • Stock is forecasted to have sequentially negative earnings growth momentum for fiscal 2023 and 2024 (below sector average).

  • Stock P/E on a discount to sector.

KPI

  • Market volatility in Europe is a headwind. Higher scrap margins on steel products add to the concerns. Global steel-making capacity exceeds demand for steel products in some regions globally. Excessive imports of steel into the United States continue to exert downward pressure on U.S. steel prices.

  • Revenue forecasted to fall 1.57% in fiscal 2023 compared to fiscal 2022. It is also forecasted to continue falling a further 4.90% in fiscal 2024 compared to the estimated revenue of fiscal 2023.

  • Net income before tax forecasted to fall in fiscal 2023 and 2024 due to scrap costs and uncertainties in Europe.

  • Increase in crude oil and energy prices.

Trade Structure

Oct 55/50 Bear Put
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