Constellium SE CSTM has been grappling with rising costs and expenses over time. In the first quarter of 2026, the company’s cost of sales increased 19% year over year to $2.04 billion due to higher raw material and consumable costs, driven by elevated aluminum prices. Selling and administrative expenses also rose 24% year over year to $97 million owing to higher labor costs. Depreciation and amortization expenses also increased 6.4% year over year to $83 million.
Despite the rising costs, Constellium delivered margin improvement in the first quarter. The company's gross margin expanded 380 basis points to 17.1% in the year-ago quarter. Net margin also improved significantly to 8.0% from 1.9% a year ago. The margin expansion was supported by strong revenue growth, favorable metal prices and robust demand across aerospace, transportation, industry and defense end markets. The company’s revenues increased 24% year over year despite slightly lower shipment volumes.
Constellium’s focus on operational execution, cost control and higher-value product offerings is expected to support profitability going forward. Favorable market dynamics and an increase in demand for packaging rolled products should continue to aid CSTM’s performance.
However, persistent inflationary pressures, higher labor costs, energy price volatility and tariff-related uncertainties remain key challenges. Nevertheless, strong end-market demand and disciplined cost management should help Constellium support margins in the quarters ahead.
Snapshot of CSTM's Peers
Among its peers, Alcoa Corporation AA has been witnessing the impacts of escalating costs and expenses over time. In the first quarter of 2026, Alcoa’s cost of sales increased 3% year over year. The metric, as a percentage of net sales, increased 630 bps to 78.7%. Alcoa’s selling, general and administrative expenses also rose 16.9% in the same period.
The escalating costs and expenses are also 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.
CSTM’s Price Performance, Valuation and Estimates
Shares of Constellium have gained 38.6% in the past three months compared with the industry’s growth of 4%.
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From a valuation standpoint, CSTM is trading at a forward price-to-earnings ratio of 11.12X, above the industry’s average of 8.44X. Constellium carries a Value Score of A.
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The Zacks Consensus Estimate for CSTM’s 2026 earnings has increased 56.8% over the past 60 days.
Image Source: Zacks Investment Research
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).