CSTM

We rate CONSTELLIUM SE (CSTM) as a Hold with a composite score of 63.6/100 at a current price of $24.76. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (85th percentile) and value (69th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (21th percentile) and stability (54th percentile) tempers our overall conviction. We assign a No Moat rating (33/100), High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CONSTELLIUM SE holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 63.6/100 places it at rank #375 in our full 7,333-stock universe. At $2.1B in market capitalization, CONSTELLIUM SE is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 20% and momentum in the 85th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 21th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 14% (-28.0pp vs sector) narrow to operating margins of 6% (+4.9pp vs sector) and net margins of 4.1%, yielding a gross-to-net conversion rate of 28%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $24.76, CONSTELLIUM SE is trading near fair value based on current fundamentals. Our value factor score of 69/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 40.3x (a 81% premium to the sector median of 22.3x), EV/EBITDA of 5.7x (discounted to peers), P/B of 4.2x, P/S of 0.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to CONSTELLIUM SE. Key risk factors include elevated market sensitivity (beta of 1.56), significant leverage (238% debt-to-equity), elevated valuation multiple (P/E 40.3x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.56); significant leverage (238% debt-to-equity); elevated valuation multiple (P/E 40.3x) that leaves limited margin for error; the combination of leverage (238% D/E) and thin margins (4.1% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 54th percentile and quality factor at the 61th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate CONSTELLIUM SE's capital allocation as Poor. Key concerns include elevated leverage (238% D/E). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CONSTELLIUM SE significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, CONSTELLIUM SE receives a Hold rating with a composite score of 63.6/100 (rank #375 of 7,333). Our quantitative framework assigns a No Moat (33/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 58/100.

Our analysis supports a neutral stance on CONSTELLIUM SE. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.