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Century Aluminum (CENX)
NASDAQ:CENX
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Century Aluminum
(NASDAQ:CENX)
64Neutral
Positive Factors
Profitability Improvement
Century's profitability profile has improved with the acquisition of 55% of the Jamalco refinery, enhancing its position to benefit from healthy aluminum prices.
Strategic Asset Review
The strategic review of the idled Hawesville smelter continues, with Century indicating that interest in the asset remains high, offering multiple options for potential value generation.
Negative Factors
High Power Costs
High power costs could be a challenge for selling the power rights or entire asset at the Hawesville smelter.
Century Aluminum (CENX) vs. S&P 500 (SPY)
Market Cap
$1.53B
Dividend YieldN/A
Average Volume (3M)2.11M
Price to Earnings (P/E)5.1
Beta (1Y)2.63
Revenue Growth1.60%
EPS GrowthN/A
CountryUS
Employees2,939
SectorBasic Materials
Sector Strength65
IndustryMining
Share Statistics
EPS (TTM)3.25
Shares Outstanding92,293,340
10 Day Avg. Volume2,089,347
30 Day Avg. Volume2,106,732
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.82
Price to Cash Flow (P/CF)43.20
P/FCF Ratio27.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.00Price Target Upside50.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Century Aluminum Business Overview & Revenue Model
Company DescriptionCentury Aluminum Company (CENX) is a leading producer of primary aluminum and operates in the industrial metals sector. Established in 1995 and headquartered in Chicago, Illinois, the company manages aluminum smelters in the United States and Iceland. Century Aluminum is committed to providing high-quality aluminum products that are used in a wide array of industries, including automotive, aerospace, and construction.
How the Company Makes MoneyCentury Aluminum generates revenue primarily through the production and sale of primary aluminum. The company's key revenue streams include the sale of aluminum to various industries such as automotive, aerospace, packaging, and construction. Century Aluminum's facilities in the United States and Iceland allow it to produce a significant volume of aluminum products, which are then distributed to a global customer base. The company also engages in strategic partnerships and long-term contracts with key customers to secure stable revenue streams. Additionally, Century Aluminum's financial performance is influenced by factors such as global aluminum prices, energy costs, and trade policies.
Century Aluminum Financial Statement Overview
Summary
Century Aluminum shows signs of financial recovery with improved profitability metrics but faces challenges in cash flow management. Revenue and profit margins have improved significantly, yet the company's reliance on debt and negative cash flow present potential risks. Addressing cash flow inefficiencies and maintaining leverage will be crucial for financial sustainability.Income Statement
Century Aluminum's revenue grew at a modest rate of 1.6% from 2023 to 2024, showing slight growth stability. The Gross Profit Margin improved significantly from 4.2% in 2023 to 8.4% in 2024, indicating enhanced operational efficiency. The Net Profit Margin turned positive to 15.3% in 2024 from a negative in 2023, a notable improvement in profitability. However, the EBIT and EBITDA margins, both at 5.5% in 2024, suggest moderate profitability performance that could be further optimized.72
Positive
Balance Sheet
The debt-to-equity ratio decreased to 0.75 in 2024 from 1.33 in 2023, showing improved financial leverage. Return on Equity (ROE) significantly increased to 48.9% in 2024, reflecting strong profitability relative to equity. Nevertheless, the equity ratio remains low at 39%, indicating a higher reliance on liabilities for asset financing, which could be a potential risk.65
Positive
Cash Flow
The company experienced a significant decline in free cash flow, turning negative in 2024, indicating cash management challenges. Operating cash flow to net income ratio was negative, suggesting operational cash flow issues despite reported net income. The free cash flow to net income ratio was also negative, signaling inefficiencies in converting net income into cash.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.22B | 2.19B | 2.78B | 2.21B | 1.61B | Gross Profit |
| 185.00M | 91.90M | 46.70M | 124.20M | -36.50M | EBIT |
| 121.40M | 31.80M | 25.00M | 66.00M | -76.20M | EBITDA |
| 448.70M | 43.40M | 82.60M | -84.60M | -11.70M | Net Income Common Stockholders |
| 336.80M | -43.10M | -14.00M | -167.00M | -123.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 32.90M | 88.80M | 54.30M | 29.00M | 81.60M | Total Assets |
| 1.94B | 1.85B | 1.47B | 1.57B | 1.40B | Total Debt |
| 518.20M | 473.70M | 548.60M | 474.10M | 340.20M | Net Debt |
| 485.30M | 384.90M | 494.30M | 445.10M | 258.60M | Total Liabilities |
| 1.28B | 1.50B | 1.07B | 1.15B | 853.50M | Stockholders Equity |
| 694.40M | 355.60M | 399.30M | 421.00M | 546.10M |
| Cash Flow | Free Cash Flow | |||
| -106.90M | 10.60M | -60.40M | -147.70M | 29.50M | Operating Cash Flow |
| -24.60M | 105.60M | 25.90M | -64.70M | 42.90M | Investing Cash Flow |
| -67.30M | -57.80M | -85.50M | -82.60M | -11.80M | Financing Cash Flow |
| 37.30M | -13.00M | 74.40M | 103.70M | 13.50M |
Century Aluminum Technical Analysis
Negative
16.60
Price Trends
19.13
Negative
19.76
Negative
17.72
Negative
Market Momentum
-0.45
Positive
39.36
Neutral
23.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CENX, the sentiment is Negative. The current price of 16.6 is below the 20-day moving average (MA) of 19.50, below the 50-day MA of 19.13, and below the 200-day MA of 17.72, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 39.36 is Neutral, neither overbought nor oversold. The STOCH value of 23.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CENX.
Century Aluminum Risk Analysis
Century Aluminum disclosed 35 risk factors in its most recent earnings report. Century Aluminum reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Century Aluminum Peers Comparison
Overall Rating
UnderperformOutperform
Sector (46)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $8.02B | 117.12 | 1.28% | 1.22% | 14.80% | 96.53% | |
64 Neutral | $1.53B | 5.10 | 64.15% | ― | 1.60% | ― | |
57 Neutral | $1.05B | 23.97 | 7.09% | 4.48% | -2.04% | -1.36% | |
52 Neutral | $1.64B | 36.68 | 5.86% | ― | -6.31% | -65.09% | |
46 Neutral | $2.64B | -3.82 | -29.96% | 3.28% | 2.83% | -29.39% |
* Basic Materials Sector Average
Performance Comparison
CENX
Century Aluminum
18.11
6.85
60.83%
AA
Alcoa
31.96
2.51
8.52%
KALU
Kaiser Aluminum
67.81
-5.46
-7.45%
CSTM
Constellium
11.41
-8.74
-43.37%
Century Aluminum Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -17.17% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presents a generally positive outlook for Century Aluminum, with strong operational performance in 2024, significant benefits expected from the reinstated U.S. tariffs, and progress on a new U.S. smelter project. However, challenges such as operational instability at Mt. Holly and higher costs due to alumina supply issues are noted.Highlights
Strong Full Year 2024 Performance
Century Aluminum generated adjusted EBITDA of $245 million for the year and $82 million for the fourth quarter, driven by strong aluminum prices and low energy costs.
Record High Alumina Prices Settled
Alumina prices reached all-time highs in late 2024, but Century Aluminum managed to mitigate costs through a financial settlement for a force majeure declared by a supplier.
Operational Success at Jamalco and Seabree
Jamalco reported the highest monthly production since its acquisition in January 2025, while Seabree delivered one of its best operational years.
Positive Impact of U.S. Section 232 Tariffs
The recent announcement by President Trump to restore Section 232 tariffs on aluminum is expected to significantly benefit Century's U.S. operations with potential increases in the Midwest Premium.
Progress on New U.S. Smelter Project
Century Aluminum made progress on a new smelter project, securing a $500 million grant from the Department of Energy, and is nearing completion of site selection and energy supply negotiations.
Lowlights
Operational Instability at Mt. Holly
Mt. Holly faced operational instability in Q4 due to an excursion on the carbon side, leading to increased costs and lower production.
Higher Costs Due to Alumina Force Majeure
A force majeure by an alumina supplier led to the need for spot purchases at higher prices, resulting in a one-time cost impact of $10 million to $15 million in Q1 2025.
Seasonal Energy Cost Increase
Normal seasonal increases in power prices are expected to be a $15 million EBITDA headwind in Q1 2025 due to cold weather.
Headcount Reduction at Jamalco
A 5% workforce reduction at Jamalco was implemented to lower labor expenses and increase productivity.
Company Guidance
During the Century Aluminum Company's Fourth Quarter 2024 Earnings Call, the company provided substantial guidance for the upcoming year. Century reported an adjusted EBITDA of $245 million for 2024, with $82 million coming from Q4, driven by strong aluminum prices averaging $2,575 and favorable energy costs. Looking ahead, the company anticipates Q1 2025 adjusted EBITDA between $75 million and $85 million, despite a $10 million to $15 million headwind from alumina supply disruptions. Spot LME aluminum prices have risen above $2,700, with the Midwest Premium trading near $0.39, indicating further potential profitability. The global aluminum market is expected to experience a deficit of over 600,000 tonnes in 2025 due to strong demand and constrained supply, with Western inventories at multiyear lows of 49 days. The U.S. Section 232 tariffs, effective March 12, 2025, are expected to increase profitability for U.S. operations as they adjust the Midwest Premium, projected to contribute significantly to future earnings. Additionally, Century plans to improve shipments to 700,000 tonnes in 2025, supported by ongoing operational enhancements and strategic projects, including a multiyear CapEx program at Jamalco and potential restarts at Mt. Holly. Overall, Century anticipates a favorable market environment and strategic advancements to bolster its financial performance in 2025.Century Aluminum Corporate Events
Executive/Board Changes
Century Aluminum Promotes Rob Hoffman to Key Roles
Neutral
Dec 11, 2024
Century Aluminum Company has announced the promotion of Rob Hoffman to Senior Vice President, Chief Information Officer, and Chief Accounting Officer. This move comes after the departure of the former principal accounting officer, Theresa Brainerd, and positions Mr. Hoffman as a key figure in the company’s financial leadership, ensuring continuity and stability in its accounting functions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.