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Why Credit Suisse Sees Attractive Opportunities in Constellium

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Credit Suisse on its top stock picks

On October 6, 2017, Credit Suisse (CS) shared a research report with its clients naming several of its top stock picks. Credit Suisse discussed Constellium (CSTM), Mohawk Industries (MHK), Kraft Heinz (KHC), BlackRock (BLK), and JPMorgan Chase (JPM) in this research report.

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Credit Suisse on Constellium

Credit Suisse shared its positive view on Constellium (CSTM), which manufactures and sells specialized aluminum products for the aerospace and automotive end markets. Constellium also has a strong position in the metal fabrication industry.

Credit Suisse believes that improving economic conditions (QQQ) (IWM), consumer demand, spending, and wage growth could be beneficial for the aerospace industry and the metal fabrication industry.

The investment firm noted in the report, “We view Constellium as one of the most attractive opportunities in the metals and mining space, as it has a clearer roadmap to more sustainable earnings growth and ROIC trends driven by improved operational performance, more efficient capital spending, and leading industry positions in automotive sheet and aerospace plate/alloy.”

Constellium’s performance

On October 19, 2017, Constellium (CSTM) traded at $10.65. Its 52-week high is $11.70, and its 52-week low is $4.85. On a year-to-date basis, the stock returned nearly 63% through October 19, 2017. 

CSTM stock returned nearly 90% over the one-year period. Its stock is currently trading at a trailing price-to-earnings ratio of ~41.0x. Credit Suisse set a current target price of $14.00 for this stock.

In the next part of this series, we’ll analyze Credit Suisse’s view on Mohawk Industries (MHK).

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