We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Constellium's Expenses are on the Rise: Will It Affect Margins?
Read MoreHide Full Article
Key Takeaways
CSTM expanded gross margin by 380 basis points and lifted net margin to 8.0% in Q1 2026.
Constellium's revenues rose 24% year over year despite slightly lower shipment volumes.
CSTM expects demand for packaging rolled products and strong end markets to support profitability.
Constellium SE (CSTM - Free Report) 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 - Free Report) 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 - Free Report) . 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%.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CSTM’s 2026 earnings has increased 56.8% over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Constellium's Expenses are on the Rise: Will It Affect Margins?
Key Takeaways
Constellium SE (CSTM - Free Report) 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 - Free Report) 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 - Free Report) . 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%.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
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.