Why Century Aluminum is on investors’ radar

Century Aluminum (CENX) has drawn attention after a recent share price move, with the stock showing double digit gains over the past week and the past 3 months, prompting investors to reassess fundamentals.

Beyond this recent surge, Century Aluminum’s 1-year total shareholder return is very large at around 3x. The year-to-date share price return of 58.89% suggests strong positive momentum building from earlier in the year.

If this kind of momentum has your attention, it could be a good moment to see what else is moving in materials and metals, starting with our 27 best rare earth metal stocks

With the stock up strongly over multiple time frames and trading below an analyst price target of US$80, the key question now is simple: is Century Aluminum still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 18.7% Undervalued

Century Aluminum’s most followed valuation view pegs fair value at $80 per share, above the last close of $65.05, which naturally puts its growth story under the microscope.

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. Expected sustained tightness in global primary aluminum supply (with China near capacity caps and minimal new ex-China projects) should maintain favorable pricing levels and strong Midwest premiums, especially as U.S. demand rebounds from infrastructure and electrification trends, providing a tailwind for top-line growth and improved EBITDA.

Curious what kind of revenue ramp, margin profile, and earnings step change need to come together for that valuation to add up? The narrative leans on accelerating top line growth, a much fatter profit margin, and a lower future earnings multiple than many investors might expect. The tension sits between ambitious forecasts and the discount rate used to pull all those cash flows back to today.

Result: Fair Value of $80 (UNDERVALUED)

However, this depends on Section 232 tariffs and firm Midwest premiums remaining supportive, while cost or timing setbacks at Mt. Holly or the Oklahoma project could undermine the thesis.

Next Steps

With both risks and rewards in play, the real question is how you weigh them and what that means for your own portfolio decisions. Take a closer look at the full picture by reviewing the 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.