JPM-JPM Mining Daily Iron Ore -百分之1.0, Spodumene 百分之3.8...-20260109

Strong 1Q26 Earnings, Cautious 2Q26 Guidance - Remain Overweight on Rising StarCandidacy

Earnings Review: CMC reported strong 1Q26 results and closed its acquisitions ofCP&P and Foley Products in December. Adjusted EBITDA of $317m came in ahead ofstreet estimates of $290m and the company saw resilient demand for long steel products inNorth America. Margins increased over 100bp sequentially and close to 400bp y/y and steelproducts metal margin increased by $132/t y/y, marking the second consecutive quarter of y/yimprovement. Market conditions for the Europe steel group remain challenging as importsimpacted selling price and margins, but the company maintained healthy levels ofprofitability due to higher shipments. Subsequent to quarter end, CMC closed theacquisitions of CP&P and Foley Products and reiterated its expectation to reduce net leveragebelow 2.0x within 18 months. PF gross and net leverage at Nov 30 was 3.0x and 2.5x,respectively and the company had over $1.7bn in total liquidity.