Century Aluminum Company CENX is benefiting from strong demand in a variety of intermediate and end markets, driven by robust manufacturing operations, particularly in the United States.

Century Aluminum Stock’s Price Performance

Shares of Century Aluminum have shot up 51.6% in the past year against a 33.5% decline of the industry.

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Strong Demand, Acquisitions to Aid CENX

Century Aluminum is well-positioned to benefit from an uptick in global aluminum demand, which is exceeding global supply growth. With expectations of resuming long-term growth rates, aided by falling interest rates and improved GDP growth in the United States and EU markets, as well as initiatives such as the Inflation Reduction Act and similar spending programs in the EU and other regions, the company anticipates a sustained increase in aluminum demand, particularly in automotive and renewable energy applications. 

Also, the global shifts toward electrification and lightweighting will continue to increase the demand for aluminum.

Century Aluminum's acquisition of Jamalco strengthened its raw material supply network and created prospects for value expansion through capital and operational enhancements. The company aims to spend between $10 million and $15 million on sustaining capital expenditures, like Jamalco. In the first quarter of 2024, the company invested $17 million in the Iceland casthouse project, using cash from its dedicated Grundartangi casthouse credit facility.

Lower Cost to Boost Century Aluminum’s Margins

Despite the adverse market conditions, the company is actively exploring many cost-cutting and cash-saving approaches. The company expects to improve its short-term financial performance by effectively managing controllable expenses.

CENX’ Zacks Rank & Other Key Picks

CENX currently sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today's Zacks #1 Rank stocks here.

Other top-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, New Gold Inc. NGD and CF Industries Inc. CF. 

Carpenter Technology currently sports a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 141% in the past year. 

New Gold, which currently carries a Zacks Rank #2 (Buy), beat the consensus estimate in three of the trailing four quarters while missing once. In this time frame, it has delivered an earnings surprise of roughly 37.5%, on average. NGD’s shares have rallied 70.5% over the past year. 

CF currently has a Zacks Rank #2, beat the consensus estimate in two of the last four quarters and missed twice, with the average earnings surprise being 10.3%. CF has gained around 6.6% in the past year.


 

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