Citigroup Maintains Buy on Commercial Metals Company After 1Q EPS Beat

Citigroup has published a research report on Commercial Metals Company

after the company reported 1Q operating EPS beating consensus estimates. In the report, Citigroup writes, "CMC reported F1Q operating EPS of $0.20, above consensus of $0.16 and our estimate of $0.19 and within the December preannouncement range of $0.14-0.24. Management expects F2Q results to be weaker but this is already reflected in the consensus estimate of $0.07 and our estimate of $0.05. GAAP EPS of $0.93 included $0.73 in net benefits related to discontinued operations. Americas operations outperformed vs our model with Mills generating a profit of $58 mln vs our $51 mln estimate; Recycling at $21 mln vs our $6 mln estimate and Fabrication with a narrower loss of -$7 mln vs our -$10 mln estimate. Americas shipments grew 12% YoY to 641k tons, much better than the 6% YoY shipment growth rate reported by service centers for long-products over the same time period." Citigroup maintains its Buy rating and $17 price target on Commerical Metals Company, which is currently trading down $0.24 from yesterday's $14.42 closing price.