The #1 Stock Everyone Gets Wrong

Steel stocks tend to be treated the same way by investors: highly cyclical, volatile, and heavily dependent on commodity pricing. When construction slows or steel prices wobble, the entire sector often gets written off.

But one stock is quietly changing that narrative. That’s why it’s our top-rated name in the steel industry … and it’s currently scoring an A or Strong Buy according to our Zen Ratings system.

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While still best known as a rebar and long-steel producer, this has been deliberately reshaping its business toward higher margins, lower volatility, and more predictable cash flow. I think what we’ll see in the future is a company that looks less like a pure steel cyclical … and more like an integrated construction materials platform. 

The stock is Commercial Metals Company (NYSE: CMC). Here’s why it matters right now. 

Protected Pricing in a Critical Market

Rebar sits at the center of CMC’s core business, and the setup heading into 2026 is more favorable than many investors realize.

Concerns around new domestic steel capacity have been largely offset by import restrictions and anti-dumping rulings, which are making foreign rebar uneconomical in the U.S. market. That protectionism has helped support pricing even as construction demand has been uneven.

After spending much of 2025 in the $750–$800 per ton range, rebar prices rebounded above $850 and recently moved closer to $900. Even if pricing moderates, a mid-$800 environment would still support healthy margins, especially with input costs under control.

This matters because it reduces one of the biggest historical risks in steel: sudden price collapses driven by oversupply.

A Strategic Shift Away From Commodity Exposure

The more important story, however, is what CMC is doing beyond steel.

Over the past year, the company has made two major acquisitions in precast and engineered concrete products: businesses that serve infrastructure and non-residential construction but operate very differently from steel.

Precast concrete involves manufacturing structural components off-site and delivering them ready to install. For contractors, that means lower labor needs, faster project timelines, and fewer delays. For CMC, it means:

• Significantly higher margins than steel
• Lower capital intensity
• Less volatile input costs
• Revenue tied to long-duration projects rather than spot pricing

These businesses already generate EBITDA margins well above CMC’s historical steel averages and give the company exposure to a fragmented market with room for consolidation.

In other words, CMC is now selling its customers more valuable products.

This shift has two important effects.

First, it raises the quality of earnings. More revenue comes from engineered products tied to infrastructure, manufacturing plants, data centers, and municipal projects … not just commodity steel shipments.

Second, it reduces volatility across the cycle. Steel will always be cyclical, but a larger contribution from precast and construction materials smooths results and improves visibility. 

It’s no wonder CMC is scoring an A in our Safety Component Grade. This measures a company's consistency in performance and gauges the predictability of earnings, cash flows, and operational metrics. This typically translates to a more stable share price with lower volatility. 

Here’s how we think about “Safety” in our stocks.

Management believes these changes can meaningfully lift full-cycle margins and free cash flow over time, while also allowing the company to pay down debt quickly and maintain flexibility for future growth.

See how CMC scores across its other Component Grades here.

As for analysts, the top names who cover the stock all rate it a Strong Buy:

Even the minimum forecast is predicting a 7% gain from here, while the most bullish call sees upward of 16% gains.

See all CMC price targets here.

Bottom Line

Commercial Metals is still exposed to steel, but it’s no longer defined by it … and the market may be missing that. 

The bull case today is that this is a company intentionally evolving into a higher-margin, more durable construction materials business … while still benefiting from protected domestic steel markets.

That makes CMC less of a short-term trade and more of a longer-term compounder with cyclical upside. And in a sector known for boom-and-bust cycles, that’s a meaningful shift.

Click here to add CMC to your watchlist.

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