Century Aluminum “well positioned” to benefit from tariffs, BMO upgrades stock

Investing.com -- BMO Capital Markets upgraded Century Aluminum Company (NASDAQ: CENX) to "Outperform" from "Market Perform" given its favourable valuation following a recent sell-off and the company's strong positioning amid rising aluminum prices and tariffs.

Century is the largest primary aluminum producer in the U.S. and is set to benefit from the upcoming increase in Section 232 aluminum tariffs to 25% from 10%. BMO noted that the Midwest Aluminum Premium (MWP) has already risen to around $0.40/lb from the low $0.20s in January, potentially adding millions to its EBITDA estimate. The brokerage sees further upside if the MWP jumps more.

The ongoing strategic review of Century's idled Hawesville smelter, with potential outcomes including a sale or restart, which could generate upto $250 million in EBITDA at current aluminum prices. Additionally, the firm pointed to increasing shareholder return potential as Century approaches its liquidity and net debt targets.

Century shares are trading at 5.6x and 5.3x BMO’s 2025 and 2026 EBITDA estimates, and below 4.0x on a spot basis, reinforcing the firm's view that the market is underappreciating the company’s earnings potential.

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