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    Should CMC’s Debt-Funded Foley Deal and J.P. Morgan Upgrade Prompt a Rethink From Investors?

    Simply Wall St·12/08/2025 09:15:17
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    • In November 2025, Commercial Metals Company closed a US$2.00 billion private offering of senior unsecured notes due 2033 and 2035 to fund its planned Foley Products acquisition, with proceeds held in escrow and a special mandatory redemption required if the deal is not completed by October 15, 2026.
    • Combined with its recent CP&P acquisition and an analyst upgrade citing benefits from stronger rebar markets and concrete synergies, CMC is pushing deeper into precast infrastructure solutions while taking on meaningful new debt to expand its construction-focused footprint.
    • We’ll now examine how this J.P. Morgan upgrade, tied to acquisition synergies and rebar fundamentals, affects Commercial Metals’ investment narrative.

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    Commercial Metals Investment Narrative Recap

    To own Commercial Metals, you need to believe that rebar and infrastructure demand, plus higher value precast products, can offset cyclical pressure on margins and heavy capital spending. The new US$2.0 billion note issue directly affects the biggest near term swing factor, which is how smoothly CMC can integrate its acquisitions while managing a higher debt load; it does not remove core risks from weaker construction activity or rising competitive rebar capacity.

    The Foley Products financing ties directly into CMC’s recent acquisition of Concrete Pipe & Precast, which broadened its early stage construction solutions portfolio. Together, these deals aim to deepen CMC’s presence in precast infrastructure and could reinforce the existing catalysts around organic and inorganic growth, but also concentrate execution risk if integration challenges or cost overruns limit the benefits that investors are hoping for.

    Yet while the acquisitions may look attractive, investors should also be aware that...

    Read the full narrative on Commercial Metals (it's free!)

    Commercial Metals' narrative projects $9.2 billion revenue and $948.4 million earnings by 2028. This requires 6.1% yearly revenue growth and an earnings increase of about $911.6 million from $36.8 million today.

    Uncover how Commercial Metals' forecasts yield a $67.85 fair value, in line with its current price.

    Exploring Other Perspectives

    CMC Community Fair Values as at Dec 2025
    CMC Community Fair Values as at Dec 2025

    Three fair value estimates from the Simply Wall St Community span roughly US$41 to US$67.85, underscoring how differently investors can assess CMC’s prospects. You should weigh those views against the risk that new rebar capacity from competitors could pressure pricing and margins, which may influence how CMC’s growth investments translate into future performance.

    Explore 3 other fair value estimates on Commercial Metals - why the stock might be worth as much as $67.85!

    Build Your Own Commercial Metals Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.