The Chicago-based aluminum company has meaningfully lowered its cost structure and has higher volume growth potential, analysts said.
"Century went on the offensive beginning in 2012, successfully renegotiating all important power contracts and acquiring additional U.S.-based production capacity. As a result, Century now has a meaningfully lower cost structure and higher volume growth potential," analysts said.
"Looking ahead, additional company-specific positive catalysts include the full impact of the cost-savings/volume-growth initiatives starting to flow through results, the potential Ravenswood restart and/or Helguvik project restart, and an upgraded product mix," analysts added.
Shares of Century Aluminum closed down 1.6% to $27.09 yesterday.
Separately, TheStreet Ratings team rates CENTURY ALUMINUM CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CENTURY ALUMINUM CO (CENX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 25.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 630.2% when compared to the same quarter one year prior, rising from -$9.51 million to $50.41 million.
- Net operating cash flow has significantly increased by 357.27% to $89.09 million when compared to the same quarter last year. In addition, CENTURY ALUMINUM CO has also vastly surpassed the industry average cash flow growth rate of -55.48%.
- Powered by its strong earnings growth of 572.72% and other important driving factors, this stock has surged by 221.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- CENTURY ALUMINUM CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CENTURY ALUMINUM CO reported poor results of -$0.46 versus -$0.41 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus -$0.46).
- You can view the full analysis from the report here: CENX Ratings Report