Alcoa vs. Constellium: Which Aluminum Company Offers More Potential for Growth?

Alcoa vs. Constellium: Which Aluminum Stock Offers More Potential?

Alcoa Corporation (AA) and Constellium SE (CSTM) are leading names in the global aluminum industry, each with a broad range of operations. With aluminum prices staying elevated due to ongoing economic uncertainty and trade issues, evaluating these two companies is especially relevant for investors interested in the metal products distribution sector.

Aluminum has become increasingly attractive as industries seek lighter, more energy-efficient solutions, particularly in electric vehicles, recycled materials, and battery technology. The push for sustainability and efficiency is fueling demand, while the aviation sector’s growth has prompted aircraft manufacturers to increase production, further boosting the need for aluminum alloys.

Given this context, let’s examine the strengths, growth outlooks, and challenges of both companies to determine which may be the better investment at this time.

Alcoa: Strengths and Challenges

Alcoa’s performance in the electrical and packaging markets has been robust, helping drive its Aluminum segment. The reopening of smelters in Spain (San Ciprián), Brazil (Alumar), and Norway (Lista) has expanded the company’s production capabilities. In 2025, Alcoa’s Aluminum segment output rose 5% year-over-year to 2,319 thousand metric tons.

Third-party sales from this segment climbed 4%, supported by higher shipment volumes and improved average prices. Looking ahead to 2026, Alcoa anticipates producing between 2.4 and 2.6 million tonnes, with shipments expected in the 2.6 to 2.8 million tonne range.

The Alumina segment is also benefiting from strong output and efficiency gains at its refineries, though the closure of the Kwinana facility has negatively impacted overall production and shipments. For 2026, alumina output is projected at 9.7 to 9.9 million tonnes, with shipments between 11.8 and 12.0 million tonnes.

Despite these positives, Alcoa is facing rising costs. In the fourth quarter of 2025, cost of sales increased 5.2% year-over-year, making up 82.7% of net sales—a rise of 480 basis points. Higher expenses for raw materials, labor, and freight are pressuring margins and could impact profitability.

Constellium: Growth Drivers and Financial Discipline

Constellium’s Packaging & Automotive Rolled Products segment is currently its main growth engine. In the fourth quarter of 2025, shipments from this segment jumped 11% to 265,000 metric tons, thanks to strong market demand. Revenue from this segment surged 34% to $1.35 billion, driven by higher metal prices and robust orders from packaging and automotive customers.

The Aerospace & Transportation segment also showed solid performance, with shipments up 21% to 53,000 metric tons and revenue rising 23% to $527 million. Strong demand from transportation, industrial, and defense sectors is supporting this growth.

Overall, Constellium’s total revenue increased 28% year-over-year to $2.2 billion, reflecting the strength of its core segments and favorable pricing.

The company is also focused on shareholder returns, having generated $178 million in free cash flow in 2025 and returning about $115 million to shareholders through share repurchases. Cost management remains a priority, with leverage reduced to 2.5x by the end of 2025.

Consensus Estimates: AA vs. CSTM

For Alcoa, the Zacks Consensus Estimate projects 2026 sales to grow by 8.3% year-over-year, with earnings per share (EPS) expected to rise 37.4%. EPS estimates for both 2026 and 2027 have been revised upward in the past two months.

For Constellium, consensus estimates suggest 2026 sales will increase by 15.6%, while EPS is set to grow by 6.8%. The company’s EPS outlook for 2026 and 2027 has also improved over the last 60 days.

Stock Performance and Valuation

Over the past year, Alcoa’s share price has advanced 82.4%, while Constellium’s stock has soared 113%.

Alcoa currently trades at a forward 12-month price-to-earnings (P/E) ratio of 11.84, below its three-year median of 13.50. Constellium’s forward P/E stands at 11.77, which is above its three-year median of 9.77.

Conclusion: Which Stock Is More Attractive?

Constellium’s strong position in packaging and aerospace, ongoing investments in growth, and commitment to shareholder returns position it well for continued expansion. The company’s positive earnings outlook further boosts investor confidence.

On the other hand, while Alcoa benefits from its presence in the electrical and packaging markets, rising operational costs and a relatively high valuation suggest a more cautious stance for current shareholders.

Currently, Constellium holds a Zacks Rank #1 (Strong Buy), while Alcoa is rated Zacks Rank #3 (Hold). Based on these factors, Constellium appears to be the more compelling choice for investors at this time.

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