Constellium (CSTM) could see sustainably higher used beverage can spreads in the next two to three years due to Section 232 tariffs, UBS Securities said in a note Monday as it initiated coverage of the stock.

Analysts said they expect some moderation in UBC spreads due to incoming new and disrupted can sheet capacity, which presents a headwind for Constellium. This can be partially offset by growth in can sheet volume and the rebounding demand in higher margin aerospace and automotive aluminum products, the brokerage said.

The company provides investors with direct exposure to scrap spreads through its Packaging & Auto Rolled Product segment, which produces over 75% of volume from can sheet body stock, according to the note.

The market is overlooking sustainably higher used beverage can spreads, with the consensus estimate at about 52% for 2027, compared with UBS's estimate of 55%, the note said.

UBS has a buy rating on Constellium, and a price target of $38.

Shares of Constellium were up more than 7% in Tuesday trading.

Price: 33.10, Change: +2.26, Percent Change: +7.33