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1. Company Snapshot

1.a. Company Description

Century Aluminum Company, together with its subsidiaries, produces standard-grade and value-added primary aluminum products in the United States and Iceland.It also owns and operates a carbon anode production facility in the Netherlands.The company was incorporated in 1981 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on CENX

Century Aluminum Company's recent performance was negatively impacted by a disappointing Q1 earnings release, missing both earnings and revenue estimates. The company reported a quarterly earnings of $0.28 per share, falling short of the Zacks Consensus Estimate of $0.53 per share. Additionally, Century Aluminum's revenue growth was hindered by lower-than-expected sales, despite higher aluminum prices. The company's financial performance was also affected by escalating production costs and a decline in its operating margin. Furthermore, the recent increase in aluminum tariffs to 50 percent, while potentially beneficial in the long term, may not have a significant short-term impact on the company's financials.

1.c. Company Highlights

2. Century Aluminum's Q3 2025 Earnings: A Strong Performance Amidst Operational Challenges

Century Aluminum Company reported a net sales figure of $632 million for Q3 2025, marking a $4 million increase from the prior quarter, primarily driven by higher realized Midwest premium. The company's net income stood at $15 million or $0.15 per share, while adjusted net income was $58 million or $0.56 per share. Adjusted EBITDA was $101 million, mainly driven by the increased Midwest premium price. The actual EPS of $0.15 fell short of estimates of $0.79. The company's financial performance was robust, with a notable increase in liquidity to $488 million, up $125 million quarter-over-quarter, and a cash balance of $151 million.

Publication Date: Nov -29

📋 Highlights
  • Increased Liquidity:: Liquidity rose to $488 million (+$125 million QoQ), with a cash balance of $151 million and net debt at $475 million.
  • Strong Q3 Performance:: Adjusted EBITDA reached $101 million, driven by higher Midwest premium prices and net sales of $632 million (+$4 million QoQ).
  • Q4 EBITDA Growth:: Outlook updated to $220 million (+$45 million) due to rising LME and regional premiums, with full-year cash flow strength expected through 2026.
  • Mt. Holly Expansion:: $50 million capital spend projected to generate $25 million incremental quarterly EBITDA post-Q2 2026 restart.
  • Debt Reduction Target:: Net debt target of $300 million achievable by early 2026, supported by $220 million in Section 45X receivables and $75 million IRS refund.

Operational Updates and Challenges

The Grundartangi smelter faced operational challenges, with potline 2 temporarily stopping production due to electrical transformer failures, and an estimated 11 to 12 months timeline for restart. In contrast, the Mt. Holly expansion project is progressing, with hiring and capital work underway, and is expected to begin producing incremental units at the beginning of Q2 2026. The company's operational mix presents both challenges and opportunities for growth.

Outlook and Guidance

Century Aluminum expects Q4 adjusted EBITDA in the range of $170 million to $180 million, driven by higher LME and regional premium prices. The business is well-positioned to generate significant cash flows over the balance of this year and throughout 2026, with strong market conditions and a shortage of aluminum units globally driving prices. The company's Q4 outlook, updated for spot metal prices, shows an expected adjusted EBITDA generation of $220 million, up $45 million.

Valuation and Capital Allocation

With a P/E Ratio of 32.82 and an EV/EBITDA of 15.41, the market appears to be pricing in a certain level of growth and profitability. The company's ROIC of 10.16% and ROE of 11.81% indicate a decent return on capital and equity. Century Aluminum plans to allocate capital to sustaining projects and organic growth, such as the Mt. Holly expansion project, and will consider returning excess cash to shareholders once its net debt target is met. Analysts estimate next year's revenue growth at 3.6%, which may impact the company's valuation multiples.

Risk Management and Hedging

The company has a hedging policy to offset market power price risk, with 22% of megawatts hedged for 2026. Century Aluminum does not plan to hedge metal prices, preferring to remain exposed to market fluctuations. The Section 232 tariffs, which benefit Century, are not impacted by the Supreme Court case and are expected to remain in place, providing a positive backdrop for the company's operations.

3. NewsRoom

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Fisher Asset Management LLC Trims Holdings in Century Aluminum Company $CENX

Dec -04

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Sells 33,907 Shares of Century Aluminum Company $CENX

Nov -17

Source: defenseworld.net

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Century Aluminum's Earnings and Revenues Lag Estimates in Q3

Nov -13

Source: zacks.com

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Century Aluminum Company (CENX) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Why Century Aluminum Stock Soared Higher Today

Nov -07

Source: fool.com

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Century Aluminum (CENX) Q3 Earnings and Revenues Miss Estimates

Nov -07

Source: zacks.com

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New Strong Sell Stocks for Nov. 6

Nov -06

Source: zacks.com

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Century Aluminum (CENX) Expected to Announce Earnings on Thursday

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.00%)

6. Segments

Primary Aluminum

Expected Growth: 7.0%

Century Aluminum Company's 7.0% growth in Primary Aluminum is driven by increasing demand from the automotive and construction industries, coupled with rising prices due to supply chain disruptions and tariffs. Additionally, the company's cost-cutting initiatives and productivity improvements have enhanced operational efficiency, contributing to the growth.

7. Detailed Products

Primary Aluminum

Century Aluminum Company produces high-purity primary aluminum, which is used in various industries such as transportation, construction, and consumer goods.

Aluminum Billets

The company produces aluminum billets, which are used as a raw material for the production of various aluminum products.

Aluminum Rods

Century Aluminum Company produces aluminum rods, which are used in various applications such as electrical conductors, welding electrodes, and other industrial uses.

Aluminum Ingots

The company produces aluminum ingots, which are used as a raw material for the production of aluminum alloys and other aluminum products.

8. Century Aluminum Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Century Aluminum Company is medium due to the availability of alternative materials such as steel, copper, and other metals that can be used in place of aluminum.

Bargaining Power Of Customers

The bargaining power of customers for Century Aluminum Company is low due to the company's strong relationships with its customers and the lack of concentration in the buyer market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Century Aluminum Company is medium due to the presence of a few large suppliers of raw materials such as bauxite and alumina.

Threat Of New Entrants

The threat of new entrants for Century Aluminum Company is low due to the high barriers to entry in the aluminum production industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry for Century Aluminum Company is high due to the presence of several large competitors in the aluminum production industry, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.52%
Debt Cost 9.02%
Equity Weight 42.48%
Equity Cost 17.29%
WACC 12.54%
Leverage 135.40%

11. Quality Control: Century Aluminum Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Oil-Dri

A-Score: 7.0/10

Value: 5.8

Growth: 9.0

Quality: 7.0

Yield: 4.0

Momentum: 10.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Friedman Industries

A-Score: 5.4/10

Value: 7.0

Growth: 6.3

Quality: 5.1

Yield: 2.0

Momentum: 8.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
US Lime & Minerals

A-Score: 5.3/10

Value: 1.6

Growth: 8.2

Quality: 8.5

Yield: 0.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Hawkins

A-Score: 5.2/10

Value: 1.6

Growth: 7.9

Quality: 5.6

Yield: 1.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Century Aluminum

A-Score: 4.2/10

Value: 5.4

Growth: 4.8

Quality: 4.6

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Clearwater Paper

A-Score: 4.1/10

Value: 9.3

Growth: 4.7

Quality: 5.9

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.08$

Current Price

31.08$

Potential

-0.00%

Expected Cash-Flows