Recent performance snapshot

Century Aluminum (CENX) has drawn fresh attention after recent trading left the stock at $65.97, with returns of 1.4% over the past week, about 12% over the past month, and roughly 25% over the past 3 months.

That recent pullback of about 2.3% in the latest session sits against a much stronger backdrop, with a year to date share price return of 61.14% and a very large 1 year total shareholder return. This suggests momentum has been building rather than fading.

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With the share price already up strongly over multiple time frames and analysts setting a higher price target than today’s level, the key question now is whether Century Aluminum is still undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 18% Undervalued

With Century Aluminum last trading at $65.97 against a fair value narrative of $80, the current price sits below what this widely followed framework implies, and that gap rests on some very specific growth and profitability assumptions.

The expansion and restart of Mt. Holly, along with progress on a new U.S. smelter, positions Century Aluminum to meaningfully increase U.S. primary aluminum production, capturing rising domestic demand driven by reshoring of supply chains and incentivized by government tariffs and trade protections. This is described as supporting future revenue growth and improved fixed cost absorption, which in turn is expected to enhance net margins. Expected sustained tightness in global primary aluminum supply (with China near capacity caps and minimal new ex-China projects) is cited as a factor that could maintain favorable pricing levels and strong Midwest premiums, particularly if U.S. demand rebounds from infrastructure and electrification trends, which would provide a tailwind for top-line growth and EBITDA according to this narrative.

The fair value hinges on a specific mix of faster top line expansion, much higher profit margins, and a lower future earnings multiple than the sector uses today. Want to see how those moving parts fit together and what kind of earnings power that implies for Century Aluminum over the next few years.

Result: Fair Value of $80 (UNDERVALUED)

However, this hinges on supportive tariffs and firm U.S. Midwest premiums, and any policy shift or setback at Mt. Holly or the Oklahoma smelter could quickly challenge it.

Next Steps

Seeing both enthusiasm and caution in this story, it makes sense to move quickly and carefully consider the full picture yourself using 4 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.