Seaport Global Securities Starts Constellium (CSTM) at Neutral
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Seaport Global Securities initiates coverage on Constellium (NYSE: CSTM) with a Neutral rating and a price target of $8.00.
Analyst Josh Sullivan commented, "We are initiating coverage of Constellium N.V. (CSTM) with a Neutral rating and $8.00 price target. CSTM's heritage as a value-added aluminum roller & extruder producer provides access to attractive markets in aerospace, automotive and packaging. While North American automotive light-weighting via aluminum (BiW & structurals) recently became in vogue, CSTM has been supplying European luxury OEMs for years. However, CSTM's expansion into North American automotive markets has proven expensive following the acquisition of Wise Metals. Now with Wise's EBITDA recovering, CSTM is again focused on executing North American BiW plans. CSTM shares have benefited from parallels drawn with the recent acquisition of Aleris by the Chinese state owned Zhongwang LLC. However, we harbor reservations over the ultimate read-throughs, given both strategic (wellfinanced competitor) and regulatory (Zhongwang investigation) concerns. Net/net, CSTM is regaining its footing; however, leverage, BiW ramp risk and its Aleris-like premium keep us on the sidelines at this point."
Shares of Constellium closed at $7.70 yesterday.
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