On Friday, BMO Capital adjusted its outlook on Century Aluminum (NASDAQ:CENX) shares, reducing the price target to $15 from the previous $17 while maintaining a Market Perform rating.
The revision follows Century Aluminum's second quarter earnings report, which revealed an EBITDA of $34 million, closely aligning with both BMO Capital's and the consensus estimates, which stood at $35 million.
The company's guidance for the third quarter EBITDA is set between $65 and $75 million, which is also in line with market expectations. However, there was no new information provided regarding the company's project pipeline, with updates anticipated in the next quarter.
BMO Capital has adjusted its near-term estimates for Century Aluminum, citing the need to reflect current market prices in their evaluation.
The firm notes that if spot aluminum prices continue to linger at the current lower levels, there could be a further downside risk to their forward estimates.
The revised price target represents a cautious stance from BMO Capital, reflecting the potential impact of the ongoing market conditions on Century Aluminum's financial performance.
The firm's commentary suggests close monitoring of aluminum prices as a significant factor for future assessments of the company's value.
InvestingPro Insights
As Century Aluminum (NASDAQ:CENX) navigates the market landscape, real-time data from InvestingPro provides a deeper look into the company's financial health and stock performance. With a market capitalization of approximately $1.2 billion and a notably low P/E ratio of 5.21, CENX presents a potentially attractive valuation for investors. However, the adjusted P/E ratio for the last twelve months as of Q1 2024 shows a stark contrast at -269.77, reflecting challenges the company has faced.
InvestingPro Tips suggest that while analysts expect net income growth this year, CENX struggles with weak gross profit margins of just 2.84%. The stock's recent volatility is also highlighted, with a significant one-month price total return of -30.67%, indicating a period of instability for investors. Despite these challenges, the company has been profitable over the last twelve months, and it's worth noting that there are over seven additional tips listed on InvestingPro, offering further insights into CENX's performance and prospects.
For investors considering Century Aluminum, these metrics and tips from InvestingPro can provide additional context to BMO Capital's revised outlook and price target adjustment. With the next earnings date approaching on November 5, 2024, and the InvestingPro fair value estimate at $16.02, closely watching the company's forthcoming financial reports and market dynamics will be key.
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