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Century Aluminum (CENX)
NASDAQ:CENX
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Century Aluminum
(NASDAQ:CENX)
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Rating:65Neutral
Price Target:
$62.00
▲(12.03% Upside)
Action:ReiteratedDate:02/23/26
The score is driven primarily by strong technical momentum and a bullish, catalyst-rich earnings update with improving guidance and recovery timelines. Offsetting these positives are only moderate underlying financial quality (thin TTM margins and uneven cash-flow history) and a stretched valuation (high P/E with no dividend support).
Positive Factors
Large U.S. smelter JV with EGA/DOE support
The Oklahoma JV (EGA 60% / Century 40%) backed by a $500M DOE grant and Bechtel engineering creates a durable scale and technology advantage. EX tech and planned capacity expansion materially raise U.S. primary supply, improve unit economics, and anchor long-term domestic market position and project financing optionality.
Improved leverage and balance sheet
Leverage materially improved versus prior years (debt/equity ~0.63), giving the company more financial flexibility to fund high-return restarts and capex. A stronger balance sheet reduces insolvency risk during commodity cycles and supports strategic investments without immediate dilutive financing.
Recovering cash generation and lower net debt
Recent quarters show meaningful cash improvement: positive TTM operating cash and FCF and Q4 operating cash of $170M reduced net debt to $421M. This improved cash generation supports reinvestment in restarts (Mt. Holly, Jamalco TG4) and staged capex while providing a cushion for cyclical downturns.
Negative Factors
Thin, volatile profitability
TTM net margin near breakeven (~0.5%) and historically volatile profitability mean small swings in input costs or prices can erase earnings. Limited margin cushion weakens predictability of free cash flow and constrains the company's ability to sustainably fund growth through commodity downcycles.
Energy and operational disruption risk
Aluminum smelting is energy‑intensive; the Grundartangi transformer failure and other disruptions (storm-related grid instability, Indiana energy spike) produced material margin losses. Recurring outage and grid risks, plus timing of repairs, can repeatedly depress output and margins over multi-quarter horizons.
Inconsistent cash flow and timing sensitivity
Cash generation has oscillated year-to-year (negative in 2021 and 2024, then positive TTM) and insurance recoveries and hedge settlements are lumpy with multi-quarter lags. Those timing mismatches create liquidity and capital-allocation risk, complicating consistent funding of restarts and project milestones.
Century Aluminum (CENX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.91B
Dividend YieldN/A
Average Volume (3M)2.48M
Price to Earnings (P/E)88.3
Beta (1Y)2.10
Revenue Growth20.15%
EPS Growth-72.89%
CountryUS
Employees2,971
SectorBasic Materials
Sector Strength58
IndustryAluminum
Share Statistics
EPS (TTM)1.25
Shares Outstanding98,974,045
10 Day Avg. Volume2,512,592
30 Day Avg. Volume2,480,029
Financial Highlights & Ratios
PEG Ratio-1.00
Price to Book (P/B)4.47
Price to Sales (P/S)1.46
P/FCF Ratio43.52
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue2.11
Enterprise Value/Gross Profit20.17
Enterprise Value/Ebitda35.02
Forecast
1Y Price Target
$59.67Price Target Upside7.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)7.9
Revenue Forecast (FY)$3.00B
Century Aluminum Business Overview & Revenue Model
Company DescriptionCentury 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.
How the Company Makes MoneyCentury Aluminum primarily makes money by producing primary aluminum at its smelting facilities and selling that metal to customers, with revenue largely driven by shipment volumes and prevailing market prices for aluminum (often referenced to benchmark aluminum prices) plus or minus product-specific premiums. Key revenue streams include (1) sales of standard-grade primary aluminum (e.g., ingot) and (2) sales of value-added primary aluminum products that can carry different premiums relative to benchmark pricing. Because aluminum smelting is highly energy-intensive, the company’s profitability is significantly influenced by input costs—especially electricity and alumina—and by operational efficiency and utilization at its smelters. Century also benefits when it can secure favorable power arrangements and reliable raw material supply (e.g., alumina) and may use commercial arrangements (such as price-linked contracts and/or hedging) to manage exposure to aluminum price volatility; specific contract terms or counterparties not publicly detailed are null.
Century Aluminum Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly constructive strategic and operational picture: management announced a transformational Oklahoma smelter JV (backed by DOE funding and Bechtel engagement), completed a lucrative Hawesville sale while retaining upside, and provided tangible operational recovery timelines that support a material production increase in 2026. Financially, adjusted EBITDA and operating cash flow improved meaningfully and leverage declined. Near-term challenges remain — notably the Grundartangi outage-driven margin loss, Hurricane Melissa disruptions at Jamalco, a short-lived Midwest energy spike and some input-cost pressure — but insurance coverage, imminent turbine completion at Jamalco, earlier-than-expected repairs at Grundartangi, a supportive pricing backdrop, and the $200 million Hawesville proceeds all materially mitigate those issues. On balance, the positives and upside catalysts outweigh the transitory headwinds.Q4-2025 Updates
Positive Updates
Oklahoma Smelter Partnership with EGA
Century announced a 60% EGA / 40% Century partnership to build the first new U.S. smelter in nearly 50 years, supported by a $500 million DOE grant. Bechtel was retained for next-stage engineering with a target final investment decision and groundbreaking by year-end. The project will use EGA's EX technology (expected >20% production improvement versus prior tech) and an expanded planned capacity of 750,000 metric tons, which management said would more than double total U.S. aluminum production.
Hawesville Sale and Strategic Equity Stake
Century closed the sale of the Hawesville site to TeraWulf for $200 million in cash and retained a 6.8% non-dilutive equity stake in the completed AI/data center. Management expects the equity stake to be worth well in excess of the cash proceeds based on current lease pricing and sector multiples. Century has no development funding obligation and holds a put right to sell its stake to TeraWulf on the first anniversary of operations, providing a defined liquidity/exit option.
Faster-than-expected Operational Recoveries
Management accelerated expectations for Grundartangi Line 2: repair-based restart now expected by end of April (about 6 months sooner than originally anticipated) with the smelter near full production by end of July. Mt. Holly restart is on track to begin in April and complete by end of June, supporting management's goal to increase U.S. aluminum production by nearly 10% in 2026. FY2026 shipment guidance is ~630,000 tons, with potential annualized production closer to 750,000 tons once projects are complete.
Strong Q4 Adjusted Results and Improved Cash/Leverage
Q4 consolidated shipments were ~140,000 tons. Net sales were $634 million (up $2 million sequentially). Adjusted net income was $128 million ($1.25 per share) excluding exceptional items; adjusted EBITDA was $171 million, up $70 million sequentially (approximately a 69% increase versus the prior quarter). Operating cash flow for Q4 was $170 million, year-end cash was $134 million, and net debt was reduced to $421 million (a $54 million reduction in the quarter). The company also received a $75 million production tax-related payment and reported a $173 million receivable related to 45X production tax credits.
Favorable Market Backdrop and Price Momentum
Global aluminum prices climbed to a four-year high of $3,325/ton in January with spot near $3,100/ton. Realized LME in Q4 was $2,615/ton (up $105 sequentially). Regional premiums strengthened (U.S. Midwest and European duty-paid premiums rose), and management expects lagged Q1 LME of $2,850/ton (up ~$230 versus Q4 realized) and a price-driven uplift that they estimated could add $70–$80 million to Q1 adjusted EBITDA before offsetting factors. Marking the guide to spot was described as an additional potential upside to results.
2026 Outlook and Capital Investment Discipline
Management provided FY2026 guidance: shipments ~630,000 tons, capital expenditures of $115–$125 million (including ~$45 million to restart last 90 pots at Mt. Holly). They expect cash interest expense to decline in 2026 and emphasized high-return, portfolio-level investments (Mt. Holly, Jamalco TG4). Q1 adjusted EBITDA guide is $215–$235 million, implying meaningful sequential improvement from Q4.
Operational Excellence at Sebree and Other Plants
Sebree achieved a record year across key KPIs and profitability metrics despite tough weather—management credited plant teams for record performance. Jamalco prepared effectively for Hurricane Melissa and avoided injuries and significant physical damage; the refinery is returning to stable production and will have an on-site TG4 turbine to reduce future energy costs.
Negative Updates
Grundartangi Potline 2 Outage and Lost Margin
A failure of three electrical transformers forced a temporary stop of potline 2 at Grundartangi, producing a significant margin loss (management cited ~$40–$50 million of lost margin in Q4). Replacement transformers have been ordered and insurers have confirmed coverage, but insurance reimbursements are expected on a 1–2 quarter lag, creating cash timing pressure. Full replacement transformers may not be installed until later in the year, though repaired units are expected to permit an earlier restart.
Hurricane Impact and Jamalco Grid Instability
Hurricane Melissa caused widespread Jamaican grid instability, resulting in higher-than-expected power costs and production disruptions at Jamalco in November and December. These disruptions increased costs and lowered volumes in Q4; management expects relief once the TG4 on-site turbine comes online (on track for April) which will eliminate grid purchases and materially reduce Jamalco's energy cost.
Short-term Energy Spike and Hedging Headwinds
Winter storm 'Fern' caused a roughly two-week Indiana Hub energy price spike that produced an estimated $20 million adjusted EBITDA headwind at Sebree (net cash impact about $15 million after hedge settlements). Management also noted that roughly 25% of Indiana Hub exposure was hedged and that realized hedge settlements will produce a $10–$15 million cash headwind in Q1 that flows through P&L below adjusted EBITDA.
Rising Input Costs and Operating Headwinds
Moderate increases in raw material prices (coke, pitch, caustic) and some OpEx pressure were expected to create a small sequential headwind of roughly $0–$5 million each in Q1. Management flagged a working capital build in Q4 due to timing of LME-linked alumina shipments.
GAAP Results and Exceptional Items Drag
GAAP net income for Q4 was only $1.8 million ($0.02 per share), significantly below adjusted net income, driven by exceptional items including share-based compensation, unrealized derivative losses, business interruption costs in Iceland and hurricane impacts in Jamaica. The company also paid $18 million in withholding taxes on share-based compensation.
Cash Timing Shortfall vs Capital Allocation Targets at Year-End
Management noted a year-end shortfall relative to capital allocation targets caused by the timing mismatch between lost margin at Grundartangi and lagged insurance recoveries and restart expenditures. Q4 cash ended at $134 million (the $200 million Hawesville cash was received in February and not included in year-end cash), highlighting short-term liquidity timing sensitivity.
Company Guidance
Management guided Q1 adjusted EBITDA of $215–$235 million (midpoint $225M), built on a lagged LME of $2,850/ton, a lagged U.S. Midwest premium of $2,140/ton ($0.97/lb) and a European duty‑paid premium of about $315/ton, while flagging a $10–$15M headwind from realized hedge settlements and $0–$5M of tax expense; they also noted a $20M EBITDA hit at Sebree from a two‑week Indiana power spike (net cash impact ≈ $15M after $5M of positive hedges), modest raw‑materials and OpEx headwinds of $0–$5M each, and a $5M benefit from improved volume/mix. For fiscal 2026 the company expects ~630,000 tons of primary aluminum shipments (rising toward ~750,000 tpa once restarts are annualized), total CapEx of $115–$125M including ~$45M to restart the last 90 pots at Mt. Holly, lower cash interest, and insurance recoveries for the Iceland outage (≈$40M received in Q1 with further payments on a 1–2 quarter lag). Recent quarter metrics: Q4 shipments ~140,000 tons, net sales $634M, adjusted EBITDA $171M, adjusted net income $128M ($1.25/sh), ending cash $134M, net debt $421M, plus $200M cash from the Hawesville sale (closed Feb) and a retained 6.8% equity stake in the data center.Century Aluminum Financial Statement Overview
Summary
Revenue is growing (TTM +11.1% to $2.53B) and the balance sheet has improved with lower leverage (debt/equity ~0.63). However, TTM profitability is very thin (~0.5% net margin) and cash flow has been inconsistent historically despite positive TTM FCF ($84.8M), limiting confidence in durability.Income Statement
TTM (Trailing-Twelve-Months) revenue grew 11.1% to $2.53B, showing improving top-line momentum. Profitability is positive but thin in TTM, with net income of $41.8M and a ~0.5% net margin, indicating limited earnings cushion. Results have been volatile across the cycle (losses in 2020–2023, a very strong 2024 with ~15% net margin), which raises confidence risk around sustainability of margins.54
Neutral
Balance Sheet
Leverage has improved versus prior years: debt to equity is ~0.63 in TTM, down meaningfully from >1.1–1.4 in 2021–2023, supported by higher equity ($870M). Total debt is moderate at ~$548M against ~$2.21B of assets. Return on equity in TTM is low (~1.5%), reflecting that while the balance sheet is healthier, current profitability is not yet strong enough to generate attractive returns.68
Positive
Cash Flow
TTM operating cash flow is solidly positive at $183.6M and free cash flow is positive at $84.8M, a clear improvement from negative free cash flow in 2024. However, cash flow performance has been inconsistent year-to-year (including negative operating cash flow in 2021 and 2024), and the provided growth figure for free cash flow is sharply negative in TTM, signaling volatility. Overall, cash generation is currently positive but not yet stable.46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.53B | 2.22B | 2.19B | 2.78B | 2.21B |
| Gross Profit | 256.40M | 185.00M | 91.90M | 46.70M | 124.20M |
| EBITDA | 142.20M | 448.70M | 43.40M | 136.10M | -84.60M |
| Net Income | 41.80M | 336.80M | -43.10M | -14.10M | -167.10M |
Balance Sheet | |||||
| Total Assets | 2.28B | 1.94B | 1.85B | 1.47B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 135.60M | 32.90M | 88.80M | 54.30M | 29.00M |
| Total Debt | 548.30M | 519.20M | 473.70M | 548.60M | 474.10M |
| Total Liabilities | 1.34B | 1.28B | 1.50B | 1.07B | 1.15B |
| Stockholders Equity | 825.60M | 694.40M | 355.60M | 399.30M | 421.00M |
Cash Flow | |||||
| Free Cash Flow | 84.80M | -106.90M | 10.60M | -60.40M | -147.70M |
| Operating Cash Flow | 183.60M | -24.60M | 105.60M | 25.90M | -64.70M |
| Investing Cash Flow | -98.80M | -67.30M | -57.80M | -85.50M | -82.60M |
| Financing Cash Flow | 15.10M | 37.30M | -13.00M | 74.40M | 103.70M |
Century Aluminum Technical Analysis
Neutral
55.34
Price Trends
50.51
Negative
41.27
Positive
32.28
Positive
Market Momentum
1.30
Positive
43.10
Neutral
44.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CENX, the sentiment is Neutral. The current price of 55.34 is above the 20-day moving average (MA) of 53.79, above the 50-day MA of 50.51, and above the 200-day MA of 32.28, indicating a neutral trend. The MACD of 1.30 indicates Positive momentum. The RSI at 43.10 is Neutral, neither overbought nor oversold. The STOCH value of 44.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CENX.
Century Aluminum Risk Analysis
Century Aluminum disclosed 76 risk factors in its most recent earnings report. Century Aluminum reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Century Aluminum Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.47B | 16.99 | 18.80% | 0.75% | 20.08% | ― | |
67 Neutral | $2.93B | 34.48 | 8.14% | 0.43% | 3.93% | -73.94% | |
65 Neutral | $4.91B | 88.30 | 5.54% | ― | 20.15% | -72.89% | |
65 Neutral | $1.82B | 16.50 | 14.22% | 2.64% | 7.69% | 91.86% | |
64 Neutral | $3.20B | 9.64 | 29.22% | ― | 8.48% | 12.10% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
45 Neutral | $1.54B | -5.92 | -13.62% | ― | -5.79% | -5.30% |
* Basic Materials Sector Average
CENX
Century Aluminum
49.65
29.54
146.89%
AA
Alcoa
58.65
24.20
70.23%
MTRN
Materion
135.42
50.46
59.40%
KALU
Kaiser Aluminum
111.97
45.23
67.78%
SID
Companhia Siderúrgica Nacional
1.19
-0.60
-33.52%
CSTM
Constellium
23.72
11.96
101.70%
Century Aluminum Corporate Events
Business Operations and StrategyM&A Transactions
Century Aluminum Completes Hawesville Site Sale and Partnership
Positive
Feb 2, 2026
On February 2, 2026, Century Aluminum’s subsidiary Century Aluminum of Kentucky completed the sale of its approximately 750-acre Hawesville, Kentucky site, including related property, to Justified DataPower LLC for $200 million in cash and a 6.8% non-dilutive minority equity stake in Raylan Data Holdings, which plans to develop a high‑performance computing and artificial intelligence data center on the site. The property will be redeveloped by TeraWulf Inc. into a digital infrastructure campus expected to generate substantial construction and permanent skilled jobs and broader economic activity for the Hawesville region, while Century retains a non‑controlling interest that keeps it economically tied to the project’s reuse even as it continues to channel significant capital into expanding its U.S. aluminum production footprint, including projects in South Carolina and Oklahoma.
The most recent analyst rating on (CENX) stock is a Hold with a $47.00 price target. To see the full list of analyst forecasts on Century Aluminum stock, see the CENX Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.