Stock Analysis

Here's What Analysts Are Forecasting For Constellium SE (NYSE:CSTM) After Its Full-Year Results

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NYSE:CSTM
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Shareholders might have noticed that Constellium SE (NYSE:CSTM) filed its annual result this time last week. The early response was not positive, with shares down 5.5% to US$13.24 in the past week. It looks like the results were pretty good overall. While revenues of €4.9b were in line with analyst predictions, statutory losses were much smaller than expected, with Constellium losing €0.15 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Constellium

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NYSE:CSTM Earnings and Revenue Growth March 1st 2021

Taking into account the latest results, the consensus forecast from Constellium's six analysts is for revenues of €5.20b in 2021, which would reflect a credible 6.4% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Constellium forecast to report a statutory profit of €0.75 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €5.14b and earnings per share (EPS) of €0.65 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

The consensus price target was unchanged at €13.75, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Constellium at €18.95 per share, while the most bearish prices it at €12.39. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Constellium's rate of growth is expected to accelerate meaningfully, with the forecast 6.4% revenue growth noticeably faster than its historical growth of 2.8%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 5.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Constellium is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Constellium's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at €13.75, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Constellium going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - Constellium has 1 warning sign we think you should be aware of.

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What are the risks and opportunities for Constellium?

Constellium SE, together with its subsidiaries, engages in the design, manufacture, and sale of specialty rolled and extruded aluminum products for the packaging, aerospace, and automotive end-markets.

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Rewards

  • Trading at 45.8% below our estimate of its fair value

  • Earnings have grown 38.2% per year over the past 5 years

Risks

  • Earnings are forecast to decline by an average of 2.7% per year for the next 3 years

  • Large one-off items impacting financial results

  • Has a high level of debt

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