Commercial Metals Company heads into its fiscal Q3 earnings release on June 25 with options traders making the most aggressive bullish bet on the stock in at least a year.
The options signal is the sharpest data point in the setup. The put/call ratio collapsed to 0.13 on June 22 — its lowest reading of the past 52 weeks, and more than four standard deviations below the 20-day average of 0.35. That is not a routine skew; it reflects an unusually large call-heavy positioning ahead of the print. The stock closed at $73.29, up 1.3% on the day but still down roughly 5% on the week, with the broader steel group under pressure: STLD fell 7.5% and NUE dropped 3.5% on the same session, while CMC outperformed both.
The short interest backdrop is unremarkable by itself, but notable in the context of that call positioning. Short interest has fallen sharply — down 25% over the past month to 4.3% of the free float, the lowest reading in the 30-day window. Borrow is cheap at 0.49%, and availability is exceptionally loose at roughly 1,140% of short interest, meaning there are more than eleven times as many shares available to lend as there are currently shorted. That combination — falling short interest, ample availability, low cost to borrow — points to a lending market entirely at ease. The call buying is not being driven by short-covering pressure; it is a directional bet.
Analyst sentiment has turned more constructive in the days immediately before the print. Morgan Stanley raised its target to $88 on June 22, reaffirming its Overweight rating — the second target lift from the firm in under a month. UBS upgraded CMC to Buy last month with a $89 target. Wells Fargo moved the other way, downgrading to Equal-Weight on June 4, citing concerns that remain live heading into Thursday: the slower-than-expected ramp at the Arizona 2 facility, delays at the West Virginia project, and the risk that new capacity additions or import flows squeeze mill margins. The consensus mean price target of $81 implies roughly 10% upside from the current price. Bulls are watching for improved North American margins and roughly $28 million in European CO2 credits that management has flagged for the quarter. Bears will point to the capex guidance cut — from $550–600 million to $425–475 million for FY25 — as a sign that the company is pulling back on growth investment rather than accelerating through a favorable demand environment.
The prior earnings release in March produced a 6.6% one-day decline, so the stock has experience moving sharply on the print. Thursday's report will test whether the margin recovery and CO2 credit benefit are large enough to justify the unusual concentration of call positioning — and whether CMC can separate itself from a steel peer group that has spent the week selling off hard.
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