What Do Analysts Think about Century Aluminum?



Earnings season

Century Aluminum (CENX) was among the best-performing aluminum stocks (AA) (RIO) last year with gains of 94%. The stock has continued its good run in 2017. It has risen more than 50% as of April 10. Century Aluminum is slated to release its 1Q17 earnings on April 25. In this part, we’ll see how analysts rate Century Aluminum before its 1Q17 earnings release. We’ll also look at its 1Q17 consensus earnings estimates.

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Consensus price target

According to consensus estimates compiled by Thomson Reuters, Century Aluminum has a mean one-year price target of $10.75—16.9% downside over its closing price on April 10, 2017. Three out of four analysts polled by Thomson Reuters rated Century Aluminum as a “hold,” while one analyst rated the stock as a “sell.”

1Q17 earnings estimates

According to data compiled by Thomson Reuters, analysts expect Century Aluminum to post revenue of $363 million in 1Q17 and $397 million in 2Q17. In contrast, it posted revenue of $340 million in 4Q16 and $319 million in 1Q16. As noted in Part 2 of this series, aluminum prices were strong in 1Q17. Higher aluminum prices are expected to boost Century Aluminum’s 1Q17 revenues.

Century Aluminum is expected to post an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $16 million in 1Q17. The company posted adjusted EBITDA of $12 million in 4Q16 and $2 million in 1Q16. Higher aluminum prices (DBB) are expected to be the key driver of Century Aluminum’s 1Q17 profitability.

In the next part of this series, we’ll look at analysts’ ratings and target prices for Norsk Hydro (NHYDY).


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