Aluminum-Lithium Margin Lifts Constellium's Performance: Analyst Anticipates Future Shareholder Returns
Portfolio Pulse from Nabaparna Bhattacharya
Benchmark analyst Josh Sullivan reiterated a Buy rating on Constellium SE (NYSE:CSTM), raising the price target to $24 from $19. The company recently reported Q2 results, raising FY23 EBITDA guidance due to robust aerospace sales. Demand for high-value aerospace plates and other products is driving significant EBITDA per ton in Aerospace & Transportation. However, the aluminum packaging market is still transitioning out of a destocking cycle. Net leverage is now 2.7x, down 0.3x y/y. With FCF improving and CSTM moving towards the 2.5x net leverage target, the company is likely to start exploring shareholder returns.
July 27, 2023 | 7:11 pm
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POSITIVE IMPACT
Constellium SE's robust aerospace sales are driving significant EBITDA per ton in Aerospace & Transportation. The company is likely to start exploring shareholder returns as it moves towards the 2.5x net leverage target.
The news of the raised price target and robust aerospace sales are positive for Constellium SE. The company's move towards the 2.5x net leverage target and potential exploration of shareholder returns also indicate a positive outlook. Therefore, the stock price is likely to go up in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100