UBS Initiates Buy Rating on Constellium, Neutral on Kaiser Aluminum
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy CSTM?
Source: seekingalpha
- Market Underestimation: UBS initiated coverage on Constellium (CSTM) with a Buy rating, arguing that the market is underestimating the support from elevated scrap spreads exceeding 60%, which are expected to sustain earnings growth over the next two to three years.
- EBITDA Forecast Increase: UBS forecasts that Constellium's EBITDA for 2026 and 2027 will be approximately 30% above consensus estimates, driven by strong scrap economics, volume growth in can sheet, and a recovery in the aerospace and automotive markets, highlighting the company's competitive edge in the aluminum sector.
- Cautious Outlook for Kaiser: UBS assigned a Neutral rating to Kaiser Aluminum (KALU), noting that its higher valuation is justified by its focus on technically complex products, but this limits its benefits from rising scrap prices, with projected EBITDA of about $424 million in 2026, a 37% increase.
- Aerospace Market Recovery: UBS emphasized that the aerospace sector will be a key medium-term growth driver for both companies, with aluminum demand expected to rebound in 2027 due to production ramp-ups at Boeing and Airbus, although differing sensitivities to scrap economics and capital allocation priorities will shape their performance.
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Analyst Views on CSTM
Wall Street analysts forecast CSTM stock price to fall
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 33.880
Low
20.00
Averages
22.33
High
25.00
Current: 33.880
Low
20.00
Averages
22.33
High
25.00
About CSTM
Constellium SE is a France-based company. The Company is predominantly engaged in the development, manufacturing, and recycling of aluminum products and solutions. It focuses on the development of aluminum products for a broad scope of markets and applications, including aerospace, packaging and automotive. It operates through three segments: Aerospace & Transportation (A&T), Packaging & Automotive Rolled Products (P&ARP), and Automotive Structures & Industry (AS&I). A&T provides aluminum solutions for aircraft and transportation. P&ARP supplies rolled products for packaging and vehicles. AS&I focuses on structural components for automotive applications, including original equipment manufacturers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
UBS Initiates Buy Rating on Constellium, Neutral on Kaiser Aluminum
- Market Underestimation: UBS initiated coverage on Constellium (CSTM) with a Buy rating, arguing that the market is underestimating the support from elevated scrap spreads exceeding 60%, which are expected to sustain earnings growth over the next two to three years.
- EBITDA Forecast Increase: UBS forecasts that Constellium's EBITDA for 2026 and 2027 will be approximately 30% above consensus estimates, driven by strong scrap economics, volume growth in can sheet, and a recovery in the aerospace and automotive markets, highlighting the company's competitive edge in the aluminum sector.
- Cautious Outlook for Kaiser: UBS assigned a Neutral rating to Kaiser Aluminum (KALU), noting that its higher valuation is justified by its focus on technically complex products, but this limits its benefits from rising scrap prices, with projected EBITDA of about $424 million in 2026, a 37% increase.
- Aerospace Market Recovery: UBS emphasized that the aerospace sector will be a key medium-term growth driver for both companies, with aluminum demand expected to rebound in 2027 due to production ramp-ups at Boeing and Airbus, although differing sensitivities to scrap economics and capital allocation priorities will shape their performance.
See More
Major Wall Street Rating Updates
- Chipotle Upgrade: Argus upgraded Chipotle Mexican Grill from Hold to Buy, indicating a return to growth, which reflects market optimism about the company's future performance.
- Full Truck Alliance Initiation: Bank of America initiated coverage on Full Truck Alliance (FTA) with a Buy rating and a price target of $11.3, implying a 33% total return potential, showcasing confidence in its business model.
- Alto Neuroscience Promising Outlook: Bank of America initiated coverage of Alto Neuroscience (ANRO) with a Buy rating and a $35 price target, emphasizing its innovative potential in treating psychiatric disorders, which may attract more investor interest.
- Amazon Supply Chain Expansion: Bank of America reiterated its Buy rating on Amazon, highlighting the significant market potential of Amazon Supply Chain Services, which offers comprehensive logistics solutions for all businesses, further solidifying its market leadership.
See More
Constellium SE Reports Record Q1 2026 Earnings and Raises Full-Year Outlook
- Strong Performance: Constellium SE achieved shipments of 370,000 tons in Q1 2026, with revenue reaching $2.5 billion, a 24% increase year-over-year, and net income of $196 million, while adjusted EBITDA surged 93% to $359 million, showcasing the company's robust market performance and significant profitability enhancement.
- Shareholder Return Plan: The company announced a new $300 million share repurchase program set to expire in December 2028, having already repurchased 1.2 million shares in Q1, returning $28 million to shareholders, indicating confidence in future cash flows and a commitment to shareholder value.
- Optimistic Outlook: Management raised the 2026 adjusted EBITDA target to a range of $900 million to $940 million, with free cash flow expected to exceed $275 million, reflecting positive expectations regarding North American automotive product supply shortages and improvements in the aerospace market, highlighting the company's strategic positioning in the industry.
- Risks and Uncertainties: Despite the optimistic outlook, management emphasized the uncertainties posed by macroeconomic and geopolitical factors, particularly in light of weak automotive demand in Europe, necessitating a cautious approach to potential market volatility.
See More
Constellium Q1 Earnings Exceed Expectations
- Earnings Beat: Constellium reported a Q1 GAAP EPS of $1.42, surpassing expectations by $0.81, indicating a significant improvement in profitability and reflecting strong performance in the aluminum products market.
- Significant Revenue Growth: The company achieved Q1 revenue of $2.46 billion, a 24.2% year-over-year increase, exceeding market expectations by $20 million, demonstrating its positive performance amid global market demand recovery.
- Strong Adjusted EBITDA: Q1 adjusted EBITDA reached $359 million, showcasing the company's success in cost control and operational efficiency, thereby enhancing its capacity for future investments and expansion.
- Optimistic Outlook: Constellium raised its guidance for 2026, now expecting adjusted EBITDA in the range of $900 million to $940 million and free cash flow exceeding $275 million, reflecting the company's confidence in future market conditions.
See More
Constellium Set to Announce Q1 Earnings on April 29
- Earnings Announcement: Constellium (CSTM) is set to release its Q1 2023 earnings on April 29 before market open, with consensus estimates predicting an EPS of $0.59 and revenue of $2.44 billion, reflecting a robust 23.2% year-over-year growth in the aluminum sector.
- Performance Beat Record: Over the past year, CSTM has exceeded EPS estimates 75% of the time and revenue estimates 100% of the time, indicating a strong reputation and consistent profitability among market analysts.
- Upward Revision Trend: In the last three months, EPS estimates have seen one upward revision with no downward adjustments, while revenue estimates have experienced two upward revisions and no downgrades, showcasing optimistic market expectations for the company's future performance.
- Long-term Supply Agreement: Constellium has secured a multi-year aluminum supply agreement with Airbus, further solidifying its market position in the aerospace sector and providing a stable revenue growth outlook for the future.
See More
Constellium Enters Multi-Year Aluminum Supply Agreement with Airbus
- Supply Agreement Established: Constellium has signed a multi-year aluminum extrusion supply agreement with Airbus, which is expected to enhance the company's long-term supply position in the aerospace sector and improve market competitiveness.
- Wide Product Range: The agreement includes a variety of aluminum alloy extrusions, such as bars and both small and large extrusions, designed to meet stringent quality requirements for demanding aircraft structural applications, ensuring high performance and reliability.
- Production Base Advantage: Constellium will supply Airbus from its facilities in Issoire and Montreuil-Juigné, France, leveraging its advanced production capabilities and technology to further solidify its leadership in the aerospace market.
- Customer Trust Reflected: Constellium's president, Philippe Hoffmann, stated that this agreement reflects Airbus's trust in its aluminum products and solutions, emphasizing the company's strengths in industrial reliability and consistent supply capabilities.
See More
UBS Initiates Buy Rating on Constellium, Neutral on Kaiser Aluminum
- Market Underestimation: UBS initiated coverage on Constellium (CSTM) with a Buy rating, arguing that the market is underestimating the support from elevated scrap spreads exceeding 60%, which are expected to sustain earnings growth over the next two to three years.
- EBITDA Forecast Increase: UBS forecasts that Constellium's EBITDA for 2026 and 2027 will be approximately 30% above consensus estimates, driven by strong scrap economics, volume growth in can sheet, and a recovery in the aerospace and automotive markets, highlighting the company's competitive edge in the aluminum sector.
- Cautious Outlook for Kaiser: UBS assigned a Neutral rating to Kaiser Aluminum (KALU), noting that its higher valuation is justified by its focus on technically complex products, but this limits its benefits from rising scrap prices, with projected EBITDA of about $424 million in 2026, a 37% increase.
- Aerospace Market Recovery: UBS emphasized that the aerospace sector will be a key medium-term growth driver for both companies, with aluminum demand expected to rebound in 2027 due to production ramp-ups at Boeing and Airbus, although differing sensitivities to scrap economics and capital allocation priorities will shape their performance.
See More
Major Wall Street Rating Updates
- Chipotle Upgrade: Argus upgraded Chipotle Mexican Grill from Hold to Buy, indicating a return to growth, which reflects market optimism about the company's future performance.
- Full Truck Alliance Initiation: Bank of America initiated coverage on Full Truck Alliance (FTA) with a Buy rating and a price target of $11.3, implying a 33% total return potential, showcasing confidence in its business model.
- Alto Neuroscience Promising Outlook: Bank of America initiated coverage of Alto Neuroscience (ANRO) with a Buy rating and a $35 price target, emphasizing its innovative potential in treating psychiatric disorders, which may attract more investor interest.
- Amazon Supply Chain Expansion: Bank of America reiterated its Buy rating on Amazon, highlighting the significant market potential of Amazon Supply Chain Services, which offers comprehensive logistics solutions for all businesses, further solidifying its market leadership.
See More
Constellium SE Reports Record Q1 2026 Earnings and Raises Full-Year Outlook
- Strong Performance: Constellium SE achieved shipments of 370,000 tons in Q1 2026, with revenue reaching $2.5 billion, a 24% increase year-over-year, and net income of $196 million, while adjusted EBITDA surged 93% to $359 million, showcasing the company's robust market performance and significant profitability enhancement.
- Shareholder Return Plan: The company announced a new $300 million share repurchase program set to expire in December 2028, having already repurchased 1.2 million shares in Q1, returning $28 million to shareholders, indicating confidence in future cash flows and a commitment to shareholder value.
- Optimistic Outlook: Management raised the 2026 adjusted EBITDA target to a range of $900 million to $940 million, with free cash flow expected to exceed $275 million, reflecting positive expectations regarding North American automotive product supply shortages and improvements in the aerospace market, highlighting the company's strategic positioning in the industry.
- Risks and Uncertainties: Despite the optimistic outlook, management emphasized the uncertainties posed by macroeconomic and geopolitical factors, particularly in light of weak automotive demand in Europe, necessitating a cautious approach to potential market volatility.
See More
Constellium Q1 Earnings Exceed Expectations
- Earnings Beat: Constellium reported a Q1 GAAP EPS of $1.42, surpassing expectations by $0.81, indicating a significant improvement in profitability and reflecting strong performance in the aluminum products market.
- Significant Revenue Growth: The company achieved Q1 revenue of $2.46 billion, a 24.2% year-over-year increase, exceeding market expectations by $20 million, demonstrating its positive performance amid global market demand recovery.
- Strong Adjusted EBITDA: Q1 adjusted EBITDA reached $359 million, showcasing the company's success in cost control and operational efficiency, thereby enhancing its capacity for future investments and expansion.
- Optimistic Outlook: Constellium raised its guidance for 2026, now expecting adjusted EBITDA in the range of $900 million to $940 million and free cash flow exceeding $275 million, reflecting the company's confidence in future market conditions.
See More
Constellium Set to Announce Q1 Earnings on April 29
- Earnings Announcement: Constellium (CSTM) is set to release its Q1 2023 earnings on April 29 before market open, with consensus estimates predicting an EPS of $0.59 and revenue of $2.44 billion, reflecting a robust 23.2% year-over-year growth in the aluminum sector.
- Performance Beat Record: Over the past year, CSTM has exceeded EPS estimates 75% of the time and revenue estimates 100% of the time, indicating a strong reputation and consistent profitability among market analysts.
- Upward Revision Trend: In the last three months, EPS estimates have seen one upward revision with no downward adjustments, while revenue estimates have experienced two upward revisions and no downgrades, showcasing optimistic market expectations for the company's future performance.
- Long-term Supply Agreement: Constellium has secured a multi-year aluminum supply agreement with Airbus, further solidifying its market position in the aerospace sector and providing a stable revenue growth outlook for the future.
See More
Constellium Enters Multi-Year Aluminum Supply Agreement with Airbus
- Supply Agreement Established: Constellium has signed a multi-year aluminum extrusion supply agreement with Airbus, which is expected to enhance the company's long-term supply position in the aerospace sector and improve market competitiveness.
- Wide Product Range: The agreement includes a variety of aluminum alloy extrusions, such as bars and both small and large extrusions, designed to meet stringent quality requirements for demanding aircraft structural applications, ensuring high performance and reliability.
- Production Base Advantage: Constellium will supply Airbus from its facilities in Issoire and Montreuil-Juigné, France, leveraging its advanced production capabilities and technology to further solidify its leadership in the aerospace market.
- Customer Trust Reflected: Constellium's president, Philippe Hoffmann, stated that this agreement reflects Airbus's trust in its aluminum products and solutions, emphasizing the company's strengths in industrial reliability and consistent supply capabilities.
See More
