Analyst Katja Jancic of BMO Capital maintained a Buy rating on Constellium (CSTM – Research Report), with a price target of $18.00.
Katja Jancic’s rating is based on Constellium’s promising outlook despite the current challenges in the market. The company’s fourth-quarter results for 2024 surpassed expectations, and it has projected a 6-11% increase in EBITDA for 2025, driven by factors such as the ramp-up of a new recycling facility and cost reductions. This growth is anticipated even amidst ongoing difficulties like compressed scrap spreads and automotive sector weaknesses in Europe.
Moreover, Constellium has reinstated its long-term EBITDA target, aiming for $900 million by 2028, which suggests a significant growth trajectory. The company’s ability to generate free cash flow exceeding $120 million is expected to facilitate the acceleration of share repurchases, enhancing shareholder value. Despite current leverage levels being above the targeted range, the potential for substantial share repurchases remains, which underscores the confidence in Constellium’s strategic direction and financial resilience.
CSTM’s price has also changed moderately for the past six months – from $16.260 to $10.430, which is a -35.85% drop .