Constellium SE’s CSTM cost structure remains under pressure from higher input and operating expenses. In the first quarter of 2026, cost of sales increased 19% year over year to $2.04 billion, driven by higher raw material and consumable costs amid elevated aluminum prices. Selling, general and administrative expenses surged 24% year over year to $97 million due to increased labor costs. Depreciation and amortization expenses also rose 6.4% year over year to $83 million, adding to the company’s cost burden.
Despite higher costs, Constellium delivered a noteworthy improvement in profitability in the first quarter of 2026. Its gross margin expanded 380 basis points year over year to 17.1%, while net margin improved significantly to 8.0% from 1.9% reported in the prior-year quarter. The margin expansion was driven by robust revenue growth, favorable metal prices and healthy demand across the aerospace, transportation and defense end markets. CSTM’s revenues increased 24% year over year despite a slight decline in shipment volumes.
Constellium remains focused on improving operational efficiency, maintaining cost discipline and increasing its mix of value-added products, which should support margin expansion over time. Also, favorable market conditions and sustained demand for packaging rolled products are expected to support the company’s performance.
However, continued inflationary pressures, elevated labor costs, energy price volatility and tariff-related uncertainties are key headwinds for the company. Despite the adversities, healthy demand across the end markets, along with disciplined cost management, should help Constellium sustain margin strength in the quarters ahead.
Snapshot of CSTM’s Peers
Among its peers, the escalating costs and expenses are a concern for Ryerson Holding Corp. RYZ. Ryerson’s cost of sales rose 37.2% year over year in the first quarter of 2026. Ryerson’s warehousing, delivery, selling, general, and administrative expenses also increased 31.2% year over year.
Alcoa Corporation AA has also been witnessing the impacts of escalating costs and expenses over time. In the second quarter of 2026, Alcoa’s cost of sales increased 11.9% year over year. However, the metric, as a percentage of net sales, decreased significantly. Alcoa’s selling, general and administrative expenses also rose 23.2% in the same period.
CSTM’s Price Performance, Valuation and Estimates
Shares of Constellium have gained 22.2% in the past six months against the industry’s decline of 22.3%.
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From a valuation standpoint, CSTM is trading at a forward price-to-earnings ratio of 9.34X, above the industry’s average of 7.75X. Constellium carries a Value Score of A.
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The Zacks Consensus Estimate for CSTM’s 2026 earnings has remained steady over the past 60 days.
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The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Constellium SE (CSTM) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
