UBS Starts Constellium (CSTM) at Buy

UBS analyst Alex Stansbury initiates coverage on Constellium (NYSE: CSTM) with a Buy rating and a price target of $38.00.

The analyst comments: “We initiate CSTM Buy, believing the market is too bearish on US Used Beverage Can (UBC) spread normalization that we believe will be sustainably higher in the next 2-3yrs due to S232 tariffs. We expect some moderation in UBC spreads as new & disrupted can sheet capacity comes into the market; whilst this presents a headwind for CSTM, we expect partial offset by CSTM can sheet volume growth & recovery in demand/vol for higher margin aero/autos products & forecast 2026/27 EBITDA 30% above consensus. Despite >60% increase in the share price YTD, at 5.6x 2026/27 EV/EBITDA vs 5yr history of ~6x (12m forward consensus) & KALU @ 9x, in our view the market is not pricing in sustainably higher UBC spreads (UBSe 2027 ~55% vs cons ~52%) & improving earnings mix. We believe consensus estimate upgrades, strong FCF (~9% 2027/28 yield), debt reduction & an accelerated cash return will drive further re-rating over the next 12m.”

For an analyst ratings summary and ratings history on Constellium click here. For more ratings news on Constellium click here.

Shares of Constellium closed at $30.84 yesterday.

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