Davenport Maintains a 'Buy' on Century Aluminum (CENX); Raises Price Target & Estimates

June 15, 2009 11:31 AM EDT

Davenport maintains a 'Buy' on Century Aluminum (NASDAQ: CENX), raises price target from $5 to $9.50.

Davenport analyst says, "We are increasing our '09 LME cash price forecast to $1,500/mt ($0.68/lb) from $1,455/mt ($0.66/lb). The increase is due to the recent run up in prices rather than any improvement in the fundamentals. The fundamentals remain extremely weak. We are maintaining our '10 and '11 price forecasts of $1,850/mt ($0.84/lb) and $2,100/mt (0.95/lb) respectively. The aluminum market should move from surplus in '09 to deficits in '10 and '11. Our long-run price forecast also is unchanged at $2,400/mt ($1.09/lb).  We are increasing our '09 EPS estimate for Century to ($3.36) from ($3.72). Our Q2 EPS estimate is now ($0.81), up from ($0.94). We are tweaking estimates thereafter based mostly on updated exchange rates. Our '10 EPS estimate goes to ($0.78) from ($0.55)...With CENX at $7.81/sh there is ~22% potential upside to our target. This is enough upside to maintain our Buy rating. In the near term, however, the major risk in our view is that aluminum prices correct after having a strong rally over the past few weeks. Any correction would likely take CENX lower. Longer term, we are comfortable recommending that investors buy CENX."

To see more analyst ratings on CENX Click Here.

Century Aluminum Company (Century Aluminum) is a holding company engaged in producing aluminum. The Company’s principal subsidiaries are Century Aluminum of West Virginia, Inc. (Century of West Virginia), Berkeley Aluminum, Inc. (Berkeley), Century Kentucky, Inc. (Century Kentucky) and Nordural ehf (Nordural).

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