Commercial Metals Co.

Nevertheless, the company's significant exposures to the volatile rebar steel market and cyclical nonresidential construction industry remain key rating constraints because they could lead to margin compression and weaker credit measures during a downturn. The stable outlook on Commercial Metals Co. (CMC) reflects our expectation that it will maintain strong adjusted debt to EBITDA of less than 2x over the next year as its benefits from the positive momentum in metals prices. However, the company's earnings are highly susceptible to fluctuations in its metal spread and volumes given the cyclicality of its markets, such as automotive and construction. We also continue to expect CMC to report EBITDA margins of about 11%-13% over this period and anticipate it will benefit from

...The resilient residential construction market and its faster-than-expected recovery supported CMC's operational performance. We expect the company to generate about $650 million-$750 million of annual adjusted EBITDA over the next two years on solid increases in the volumes in both its domestic and Polish steel mills and fabrication businesses. CMC's facilities were able to remain open in the U.S. and Poland amid the lockdowns related to the coronavirus pandemic due to their participation in a critical infrastructure industry. While the challenging market conditions brought on by the pandemic temporarily slowed the company's volumes sold, the domestic demand for rebar and merchant rod rebounded in the second half of 2020, causing its first-quarter 2021 (ending Nov. 30, 2020) volumes to improve almost back to pre-pandemic levels. We expect the company's overall economic health to improve over the next few years given our forecast that U.S. real GDP will expand by about 4.0%-4.5% in 2021...

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