Century Aluminum stock reacts to new Brimstone supply deal

Century Aluminum (CENX) has entered a new partnership with Brimstone to build a US based mine to metal aluminum supply chain, with Brimstone supplying significant alumina volumes from its upcoming plant.

Century Aluminum's share price has been under pressure recently, with a 30 day share price return down 31.28% and a 7 day return down 11.12%. This comes even though the year to date share price return is 12.26% and the 1 year total shareholder return is very large. This suggests earlier optimism is now meeting some caution as investors reassess growth potential and risk after a strong multi year total shareholder return.

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Century Aluminum’s share price has pulled back sharply even as its price target and some valuation metrics sit higher than the current US$45.96 level. This raises the question: is this recent weakness a potential entry point, or is the market already pricing in future growth?

Most Popular Narrative: 42.6% Undervalued

Century Aluminum's most followed narrative sets a fair value of $80 per share, well above the recent $45.96 close, which puts a spotlight on the assumptions behind that gap.

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, supporting future revenue growth and improved fixed cost absorption, thus enhancing net margins.

Want to see what this narrative is really banking on? Rapid top line growth, fatter margins, and a future earnings multiple that looks surprisingly restrained. The full breakdown joins those pieces into one valuation story.

Result: Fair Value of $80 (UNDERVALUED)

However, this Century Aluminum narrative still leans on Section 232 tariffs and elevated power costs remaining supportive, while high input cost volatility could quickly pressure margins if conditions change.

Next Steps

Given the mix of optimism and concern around Century Aluminum right now, it makes sense to move quickly and test the story against the numbers yourself. A good place to start is with the full picture of 5 key rewards and 1 important warning sign

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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.