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Constellium (CSTM)
NYSE:CSTM
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Constellium
(NYSE:CSTM)
51Neutral
Positive Factors
EBITDA Drivers
Constellium has multiple EBITDA drivers that should aid next year's results, including contributions from the Neuf-Brisach recycling facility, cost savings from the Vision 25 program, aerospace contracts repricing, and Muscle Shoals improvement.
Share Repurchase Potential
Constellium has a three-year share repurchase program, with ~$221m remaining on the current authorization, implying potential to repurchase ~$100m or nearly 7% of shares outstanding.
Negative Factors
Demand Weakness
The demand across most end markets is softening and/or weakening, impacting the company's revised guidance for 2024 and delaying the 2025 outlook.
Supply Chain Disruptions
Intensifying supply chain disruptions in Aerospace continue to be a headwind, affecting the cadence of future growth and impacting EBITDA margins.
Constellium (CSTM) vs. S&P 500 (SPY)
Market Cap
$1.14B
Dividend YieldN/A
Average Volume (3M)1.62M
Price to Earnings (P/E)25.9
Beta (1Y)1.16
Revenue Growth-6.31%
EPS Growth-65.09%
CountryUS
Employees12,000
SectorBasic Materials
Sector Strength58
IndustryAluminum
Share Statistics
EPS (TTM)0.31
Shares Outstanding143,523,320
10 Day Avg. Volume1,771,995
30 Day Avg. Volume1,615,641
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.20
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.67Price Target Upside106.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Constellium Business Overview & Revenue Model
Company DescriptionConstellium (CSTM) is a global leader in the manufacturing of high-value-added aluminum products and solutions. The company operates primarily in the aerospace, automotive, and packaging sectors, providing advanced aluminum materials and services that enhance performance, safety, and sustainability. Constellium is known for its innovative approaches to designing and producing products that meet the specific needs of its diverse clientele.
How the Company Makes MoneyConstellium makes money by producing and selling aluminum products that cater to various industries, including aerospace, automotive, and packaging. Its revenue model is primarily based on long-term contracts and spot sales with major manufacturers and suppliers in these sectors. The company benefits from strategic partnerships and collaborations that enhance its market reach and product offerings. Additionally, Constellium invests in research and development to innovate and improve its product lines, thereby maintaining a competitive edge and driving sales. Key revenue streams include the sale of sheets, plates, extrusions, and other aluminum-based components tailored to client specifications. The company's earnings are also influenced by factors such as aluminum market prices, global demand for lightweight and sustainable materials, and operational efficiencies.
Constellium Financial Statement Overview
Summary
Constellium's financial performance shows mixed results. The gross profit margin is strong, but the net profit margin and revenue growth are weak, indicating cost management and growth challenges. The balance sheet is highly leveraged, limiting flexibility, and negative free cash flow raises liquidity concerns.Income Statement
Constellium's income statement demonstrates a mixed performance. The TTM data shows a gross profit margin of 31.68%, reflecting a solid profitability level. However, the net profit margin is relatively low at 0.61%, indicating potential challenges in cost management. The revenue growth rate between the latest annual report and TTM is negative, at -4.61%, suggesting a decline. EBIT and EBITDA margins in the TTM are 26.61% and 4.26%, respectively, pointing to operational efficiency challenges.65
Positive
Balance Sheet
The balance sheet reveals a moderate financial structure with a debt-to-equity ratio of 2.64 in the TTM, indicating significant leverage that could pose risks if not managed. ROE is relatively low at 5.78%, suggesting that equity is not being used to its fullest potential. The equity ratio is 15.35%, reflecting a low proportion of equity financing, which may limit financial flexibility.58
Neutral
Cash Flow
Cash flow analysis highlights some challenges, with a negative free cash flow growth rate and a negative free cash flow in the TTM, implying difficulties in generating cash after capital expenditures. The operating cash flow to net income ratio is strong at 8.42, showing good cash generation relative to net income. However, the negative free cash flow to net income ratio indicates insufficient cash flow to cover net income.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.08B | 7.24B | 8.12B | 6.15B | 4.88B | Gross Profit |
| 905.45M | 710.00M | 672.00M | 664.00M | 490.00M | EBIT |
| 556.01M | 337.00M | 334.00M | 484.00M | 125.00M | EBITDA |
| 530.91M | 605.00M | 601.00M | 764.00M | 454.00M | Net Income Common Stockholders |
| 54.06M | 125.00M | 301.00M | 257.00M | -17.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 141.00M | 210.00M | 197.00M | 205.00M | 478.00M | Total Assets |
| 4.73B | 4.66B | 4.94B | 4.62B | 4.13B | Total Debt |
| 1.94B | 1.87B | 2.06B | 2.13B | 2.39B | Net Debt |
| 1.79B | 1.69B | 1.89B | 1.98B | 1.95B | Total Liabilities |
| 4.01B | 3.80B | 4.19B | 4.33B | 4.23B | Stockholders Equity |
| 681.50M | 843.00M | 731.00M | 274.00M | -115.00M |
| Cash Flow | Free Cash Flow | |||
| -108.11M | 169.00M | 178.00M | 125.00M | 152.00M | Operating Cash Flow |
| 290.56M | 506.00M | 451.00M | 357.00M | 334.00M | Investing Cash Flow |
| -302.14M | -288.00M | -270.00M | -221.00M | -176.00M | Financing Cash Flow |
| -58.88M | -182.00M | -163.00M | -435.00M | 101.00M |
Constellium Technical Analysis
Negative
8.06
Price Trends
10.37
Negative
10.69
Negative
13.23
Negative
Market Momentum
-0.11
Positive
37.04
Neutral
11.41
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTM, the sentiment is Negative. The current price of 8.06 is below the 20-day moving average (MA) of 10.13, below the 50-day MA of 10.37, and below the 200-day MA of 13.23, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 37.04 is Neutral, neither overbought nor oversold. The STOCH value of 11.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTM.
Constellium Risk Analysis
Constellium disclosed 31 risk factors in its most recent earnings report. Constellium reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Constellium Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $1.44B | 4.85 | 64.15% | ― | 1.60% | ― | |
60 Neutral | $6.15B | 84.70 | 1.28% | 1.62% | 14.80% | 96.53% | |
56 Neutral | $841.57M | 18.23 | 7.09% | 5.89% | -2.04% | -1.36% | |
51 Neutral | $1.14B | 25.91 | 5.86% | ― | -6.31% | -65.09% | |
50 Neutral | $1.14B | ― | -104.11% | ― | -16.92% | -6107.70% | |
47 Neutral | $817.58M | ― | -41.03% | 2.58% | -4.98% | -910.57% | |
47 Neutral | $2.49B | -2.97 | -22.82% | 3.51% | 4.13% | -28.53% |
* Basic Materials Sector Average
Performance Comparison
CSTM
Constellium
8.06
-12.95
-61.64%
AA
Alcoa
24.75
-11.41
-31.55%
CENX
Century Aluminum
15.60
-2.15
-12.11%
KALU
Kaiser Aluminum
55.50
-29.93
-35.03%
RDUS
Schnitzer Steel Industries
29.07
12.27
73.04%
NGVT
Ingevity
31.96
-12.97
-28.87%
Constellium Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -11.14% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
Constellium faced a challenging year in 2024 with significant declines in revenue, net income, and free cash flow, primarily due to market headwinds and the Valais flood. However, the company managed to return cash to shareholders, opened a new recycling center, and identified opportunities from tariffs. Long-term growth targets and strong liquidity provide a positive outlook.Highlights
Share Buyback Program
Constellium returned $79 million to shareholders through the repurchase of 4.6 million shares during 2024.
New Recycling and Casting Center
The company started up its new recycling and casting center in Neuf-Brisach in September, slightly ahead of schedule and below budget, contributing to future cost savings.
Positive Impact from Tariffs
Potential opportunities from Section 232 tariffs include increased competitiveness of domestically produced products and improved availability of scrap in the US.
Strong Liquidity Position
Constellium reported strong liquidity of $727 million at the end of 2024.
Long-Term Growth Targets
By 2028, Constellium aims to achieve adjusted EBITDA of $900 million and free cash flow of $300 million, driven by market growth, operational improvements, and return-seeking investments.
Lowlights
Decrease in Revenue and Shipments
Revenue of $7.3 billion decreased 6% in 2024 compared to 2023 due to lower shipments and unfavorable price and mix.
Valais Flood Impact
The flood in Valais negatively impacted adjusted EBITDA by $33 million for the full year 2024.
Net Income Decline
Net income declined from $157 million in 2023 to $60 million in 2024.
Negative Free Cash Flow
Free cash flow was negative $100 million for 2024, impacted by the Valais flood and changes in deferred purchase price receivables.
Challenging Market Conditions
Constellium faced headwinds from demand weakness across most end markets, significant tightening of scrap spreads in North America, and unfavorable foreign exchange rates.
Company Guidance
During the Constellium fourth quarter and full year 2024 earnings call, the company provided detailed guidance and metrics reflecting both challenges and strategic initiatives. For the fourth quarter, shipments decreased by 2% to 328,000 tons, and revenue fell by 1% to $1.7 billion compared to the previous year. The net loss was $47 million, contrasting with a $5 million net income in Q4 2023. Adjusted EBITDA was reported at $125 million, including a $27 million positive non-cash impact from metal price lag, but also a $15 million negative impact from a flood in Valais. Excluding these impacts, adjusted EBITDA stood at $113 million, down from $178 million in the prior year. For the full year 2024, shipments were 1.4 million tons and revenue was $7.3 billion, with adjusted EBITDA at $623 million, impacted negatively by $33 million from the Valais flood but positively by $55 million from metal price lag. Cash from operations for Q4 was $61 million, and the company repurchased $18 million worth of shares. For 2025, Constellium targets adjusted EBITDA between $600 million and $630 million, excluding metal price lag, and free cash flow over $120 million, reflecting market challenges and cost reduction efforts. By 2028, they aim for adjusted EBITDA of $900 million and free cash flow of $300 million, leveraging operational improvements and market growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.