Constellium (NYSE:CSTM) Reaches New 1-Year High Following Earnings Beat

Key Points

• Constellium shares hit a new 52-week high after reporting a quarterly EPS of $1.42 vs. $0.57 expected and revenue of $2.46B, up 24.4% year-over-year.
• The board approved a $300 million share repurchase program to buy up to 8.8% of outstanding shares, signaling management believes the stock is undervalued.
• Analysts have become more positive—four Buy vs. two Hold—resulting in a MarketBeat consensus of “Moderate Buy” and an average target price of $31.50.

Constellium SE (NYSE:CSTM - Get Free Report) shares reached a new 52-week high during mid-day trading on Wednesday after the company announced better than expected quarterly earnings. The stock traded as high as $33.11 and last traded at $32.9730, with a volume of 620589 shares traded. The stock had previously closed at $31.08.

The industrial products company reported $1.42 EPS for the quarter, beating analysts' consensus estimates of $0.57 by $0.85. The firm had revenue of $2.46 billion during the quarter, compared to the consensus estimate of $2.41 billion. Constellium had a return on equity of 32.14% and a net margin of 3.23%.Constellium's revenue for the quarter was up 24.4% on a year-over-year basis. During the same quarter in the prior year, the business posted $0.26 earnings per share.

Constellium declared that its board has approved a share repurchase program on Thursday, March 12th that permits the company to buyback $300.00 million in outstanding shares. This buyback authorization permits the industrial products company to buy up to 8.8% of its shares through open market purchases. Shares buyback programs are generally an indication that the company's leadership believes its stock is undervalued.

Analysts Set New Price Targets

A number of research analysts have commented on the company. Deutsche Bank Aktiengesellschaft reaffirmed a "buy" rating and set a $29.00 target price on shares of Constellium in a report on Thursday, April 9th. Wells Fargo & Company increased their target price on Constellium from $29.00 to $35.00 and gave the stock an "overweight" rating in a report on Wednesday, April 15th. JPMorgan Chase & Co. increased their target price on Constellium from $29.00 to $30.00 and gave the stock an "overweight" rating in a report on Thursday, April 16th. BMO Capital Markets set a $32.00 target price on Constellium and gave the stock an "outperform" rating in a report on Thursday, April 9th. Finally, Zacks Research downgraded Constellium from a "strong-buy" rating to a "hold" rating in a report on Monday, April 13th. Four equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $31.50.

Insider Buying and Selling at Constellium

In other news, CEO Ingrid Joerg sold 4,614 shares of the stock in a transaction that occurred on Tuesday, March 10th. The stock was sold at an average price of $25.87, for a total transaction of $119,364.18. Following the sale, the chief executive officer directly owned 378,090 shares in the company, valued at approximately $9,781,188.30. This represents a 1.21% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Jack Q. Guo sold 41,717 shares of the stock in a transaction that occurred on Tuesday, March 10th. The stock was sold at an average price of $25.87, for a total value of $1,079,218.79. Following the sale, the chief financial officer owned 190,879 shares in the company, valued at $4,938,039.73. The trade was a 17.94% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders sold 214,543 shares of company stock worth $5,565,129. Corporate insiders own 1.20% of the company's stock.

Institutional Trading of Constellium

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Ethic Inc. raised its position in shares of Constellium by 1.6% during the 4th quarter. Ethic Inc. now owns 29,283 shares of the industrial products company's stock worth $552,000 after purchasing an additional 456 shares during the period. Mackenzie Financial Corp increased its position in Constellium by 0.4% in the 4th quarter. Mackenzie Financial Corp now owns 132,642 shares of the industrial products company's stock valued at $2,511,000 after acquiring an additional 512 shares during the period. Moran Wealth Management LLC increased its position in Constellium by 6.7% in the 1st quarter. Moran Wealth Management LLC now owns 11,025 shares of the industrial products company's stock valued at $271,000 after acquiring an additional 692 shares during the period. GAMMA Investing LLC increased its position in Constellium by 29.7% in the 4th quarter. GAMMA Investing LLC now owns 3,089 shares of the industrial products company's stock valued at $58,000 after acquiring an additional 707 shares during the period. Finally, Allworth Financial LP increased its position in Constellium by 52.5% in the 4th quarter. Allworth Financial LP now owns 2,074 shares of the industrial products company's stock valued at $39,000 after acquiring an additional 714 shares during the period. 92.59% of the stock is currently owned by institutional investors and hedge funds.

Constellium Trading Up 6.6%

The company has a current ratio of 1.29, a quick ratio of 0.51 and a debt-to-equity ratio of 1.96. The stock has a market capitalization of $4.51 billion, a price-to-earnings ratio of 17.17 and a beta of 1.43. The firm has a 50-day moving average of $26.79 and a 200 day moving average of $21.70.

Constellium Company Profile

Constellium SE is a global leader in the design and manufacture of high-performance aluminum products and solutions. The company serves key markets including aerospace, automotive, and packaging, offering advanced rolled and extruded aluminum sheet, plate and structural components. Its product portfolio encompasses precision-engineered parts for commercial and military aircraft, automotive body structures and closures, beverage and specialty packaging, as well as industrial and structural applications.

Established in 2011 through the consolidation of Rio Tinto Alcan's rolled-products and engineered-products businesses, Constellium has built a reputation for innovation in lightweighting and sustainability.

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