Credit Suisse Predicts A 40% Rally For This Little-Known Aluminum Products Maker

According to Credit Suisse Securities, Constellium's shares are too cheap to ignore, with the company's stock looking too cheap to ignore.

‍

In a note to clients on Thursday, Curt Woodworth highlighted the firm's bullish case for Constellium, saying its $22 price target, which foretells the stock may gain almost 40% from its closing price on Wednesday, is quite bullish for the company.

‍

As the analyst wrote in his report, Constellium's equity, which is rated outperform by the analyst, deserves a valuation multiple that is closer to that of other diversified industrials with a high quality growth profile. Given the excellent performance of [management], and the strong track record it has demonstrated in optimizing [free cash flow] and margins.

‍

As a result of the adjusted EBITDA coming in above Trade Algo's estimates for the latest quarter, shares of the Paris-based company jumped more than 13% on Wednesday, and management affirmed confidence in the company's long-term targets, it is expected that their shares would rise. There has been a dramatic rise in the stock this year, which trades on the New York Exchange, after a slump of 34% last year. The stock is soaring 34% this year.

‍

Despite still facing inflationary pressures in the near future, Woodworth expressed confidence that Constellium's management is in the best of hands.

‍

In his letter, he wrote, "CSTM continues to deliver excellent results, as evidenced by excellent price vs cost progress in 2022 and a forecast for 2023 that was better than expected driven by the reduction in energy prices and strong price actions achieved during the last quarter."