Update (9:41 a.m.): Updated with Monday market open information.
NEW YORK (TheStreet) -- Bank of America/Merrill Lynch upgraded Century Aluminum (CENX - Get Report) to "neutral" and set a $14 price target. The firm noted the company is leveraged to higher aluminum prices.
The stock was up 4.62% to $14.28 at 9:40 a.m. on Monday.
TheStreet Ratings team rates CENTURY ALUMINUM CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CENTURY ALUMINUM CO (CENX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 31.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, CENX's share price has jumped by 30.49%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CENX's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.41 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for CENTURY ALUMINUM CO is currently extremely low, coming in at 2.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.77% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$10.74 million or 147.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: CENX Ratings Report