CSTM

Constellium SE - Ordinary Shares - Class A

Industrial/Transportation


Presented:12/09/2021
Price:$17.66
Cap:$2.47B
Current Price:$14.54
Cap:$2.13B

Presented

Date12/09/2021
Price$17.66
Market Cap$2.47B
Ent Value$5.05B
P/E Ratio7.6x
Book Value$1.95
Div Yield0%
Shares O/S139.98M
Ave Daily Vol887,081
Short Int2.69%

Current

Price$14.54
Market Cap$2.13B
Constellium SE operates as a holding company with interest in the design and manufacture of a range of specialty rolled, and extruded aluminum products, serving primarily the aerospace, packaging and automotive end-markets. The company operates through the following segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry. The Packaging & Automotive Rolled Products segment includes the production of rolled aluminum products. The Aerospace & Transportation segment includes the production of rolled and extruded aluminum products for the aerospace market, as well as rolled products for transport and industry end-uses. The Automotive Structures & Industry segment includes crash-management systems, body structures and side impact beams in Germany, North America and China. The company was founded on May 14, 2010 and is headquartered in Paris, France.

Publicly traded companies mentioned herein: Constellium SE (CSTM)

Highlights

The presenter is long shares of Constellium SE (CSTM), a producer of rolled and extruded aluminum products for packaging, aerospace, automotive, industrial, and defense customers that has a $2.5B market cap and $4.7B EV. Exiting COVID, he feels the company has proven itself more resilient than it is given credit for and now views it as a well-positioned player in an attractive space. CSTM has been a solid performer this year (+20% YTD), but there is material upside over the next two years based on EBITDA growth and multiple expansion. The current valuation is around 7x and 6x consensus EBITDA for 2022 and 2023, respectively, but the valuation is closer to 7.5x 2022 and 6.5x 2023 when penalized for the pension liability of just under €600MM. It has historically traded at 6x – 7x EBITDA and he normalizes the valuation for where the market is trading, assigning an 8x multiple to CSTM. This slight multiple expansion and his upside to Street 2023 numbers yields a $25 price target.

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Idea Discussion

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