Commercial Metals Surges on Strong Q1 Earnings and Steel Demand
Shares jumped more than 2% after the steel producer handily beat profit and revenue expectations, citing robust demand in North American construction markets.
Shares of Commercial Metals Company (NYSE: CMC) climbed more than 2% in early trading Thursday after the company posted first-quarter earnings that significantly outpaced analyst expectations, signaling continued strength in the North American steel and construction markets.
The Irving, Texas-based steel manufacturer and recycler reported adjusted earnings of $1.84 per share for the fiscal first quarter of 2026, well above the analyst consensus of $1.56. Revenue for the quarter reached $2.12 billion, an 11% year-over-year increase that also exceeded forecasts.
The strong results were driven by the company's largest business units. The North America Steel Group saw its adjusted EBITDA, a key measure of profitability, surge by nearly 58% to $293.9 million compared to the prior year. The Construction Solutions Group experienced even more dramatic growth, with adjusted EBITDA jumping by almost 75% to $39.6 million.
In a statement accompanying the results, the company attributed the performance to strong end-market demand and favorable steel margins. The results reflect a resilient construction sector, which serves as the primary consumer of CMC's core products like rebar and wire rod, essential components for infrastructure projects, and non-residential building.
"The first quarter performance demonstrates the effectiveness of our strategic initiatives and the continuing strong demand for our products," the company's management noted, pointing to healthy backlogs and a positive outlook for the upcoming second quarter. The company expects shipping volumes in its North America Steel Group to follow typical seasonal patterns in Q2, while its Europe Steel Group is also anticipated to see a seasonal uptick in shipments.
The earnings beat prompted positive reactions from Wall Street. A number of analysts reiterated positive ratings on CMC stock, with some increasing their price targets in light of the strong operational performance and management's optimistic guidance. The company currently has a consensus analyst price target of around $74 per share.
CMC's results also reflect the successful integration of recent acquisitions aimed at expanding its footprint in the construction materials space. The company recently completed the purchase of Concrete Pipe & Precast, LLC (CP&P) and other assets from Foley, Inc., creating a new growth platform in the precast concrete industry, which complements its core steel offerings.
With a market capitalization of over $8 billion, Commercial Metals is a key player in the U.S. materials sector. Investors will be closely watching whether momentum from federal infrastructure spending and a stable construction market will continue to bolster demand and support the company's growth trajectory through the remainder of its fiscal year.