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How Wall Street Sees Century Aluminum after a 2Q17 Earnings Miss


Aug. 11 2017, Updated 8:08 a.m. ET

2Q17 earnings miss

Century Aluminum (CENX) released its 2Q17 financial results on August 2 after the markets closed. The company reported revenues of $2.86 billion in 2Q17 versus $2.66 billion in 1Q17 and $2.32 billion in 2Q16. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) also rose to $34.0 million in 2Q17, versus $22.2 million in the sequential quarter. Notably, while Century Aluminum’s 2Q17 EBITDA rose on a sequential basis, Alcoa’s (AA) profits fell over this period. Nonetheless, Century Aluminum’s 2Q17 earnings fell well short of analysts’ estimates, and the stock saw selling pressure after its 2Q17 earnings release. Let’s see how analysts rate the stock after its 2Q17 earnings miss.

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Analysts’ ratings

According to consensus estimates compiled by Thomson Reuters, Century Aluminum carries a mean one-year price target of $15, which represents 6.8% upside over its closing price on August 9. In contrast, the stock carried a one-year target price of $15.38 on August 1—one day before its earnings release.

Century Aluminum has received a “hold” rating from all four analysts polled by Thomson Reuters. In contrast, Norsk Hydro (NHYDY) has been rated as a “hold” by 48% of analysts polled by Thomson Reuters. The remaining analysts rate the stock as a “buy” or equivalent.

Industry outlook

We should remember that for aluminum companies, the macro environment—which includes commodity prices (XME)(SOUHY)—is at least as important as the company’s relative position in the industry. Aluminum prices have been strong over the last couple of weeks. In the next part of this series, we’ll see what different aluminum producers had to say about the aluminum industry’s outlook during their 2Q17 earnings calls.


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