UPDATE: J.P. Morgan Raising Price Target On Commercial Metals (CMC)

J.P. Morgan Chase & Co. is raising its price target on shares of Commercial Metals CMC to $20 from $17, but is reiterating its Neutral rating. In a note to investors, J.P. Morgan writes, "We are introducing FY2012 estimates and lifting our price target to $20 from $17. The higher target reflects a willingness to look beyond lowered 2H FY2011 estimates and into FY2012, when persistent segment headwinds should begin fading. Specifically, in the near term CMC faces challenging fabrication markets and a turnaround at the Croatian Mill, which offset earnings leverage to steel price hikes over the next several quarters. Although the recent correction increases CMC's appeal as a call option on a construction recovery, we would await a more attractive entry point to compensate for the time likely needed to turn around the Croatian Mill and re-establish profitability in the Fabrication segment. As such, we reiterate our Neutral rating on CMC." Shares of CMC lost 37 cents yesterday to close at $15.69, a loss of 2.3%.