Century Aluminum draws focus as Q1 miss meets strong US expansion outlook

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The US-based Century Aluminum (CENX) is back in focus, as its first quarter (Q1) of 2026 financial results depicted a mixed picture. While revenue surpassed market expectations, adjusted earnings per share (EPS) did not meet consensus estimates. Nonetheless, management’s strong Q2 EBITDA guidance and operational progress at the Mount Holly expansion and Norðurál smelter have helped maintain investor confidence amid continued volatility in the metals sector. 

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Century’s share price has softened in the near term, declining 7.52 per cent in a day and 8.71 per cent over the past month. However, the broader trend remains firmly positive, with the stock gaining 23.41 per cent over 90 days and delivering a three-year shareholder return of more than 612 per cent.

The company’s US growth strategy, central to the bullish outlook, is crucial in influencing market optimism. The expansion and reopening of Mount Holly, coupled with plans for a new domestic smelter, are expected to improve primary aluminium production in the US, especially since local supply chains are backed by reshoring efforts and trade protections. Fixed cost absorption could be improved by higher production volumes, thereby enhancing the margins in the longer term. 

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Valuation snapshot

In terms of valuation, Century Aluminum closed at USD 56.82, well below a widely cited fair value estimate of around USD 79.33, implying potential upside of roughly 28 per cent. Analysts note, however, that the outlook depends heavily on continued Section 232 tariff support, stable Midwest premiums and the timely execution of expansion projects. Any delays or cost overruns could weigh on the investment case.

Different types of valuation methods have generated varied signals. While the Discounted Cash Flow (DCF) view suggests a very wide gap to fair value at approximately USD 229 per share, the earnings multiple has presented a more balanced picture.

At present, Century Aluminum trades at a Price-to-Earnings (P/E) ratio of 16.1x, which remains below the broader US metals and mining industry average of 21x but above its peer average of 13.4x. The difference here points to the ongoing debate over whether the stock still offers a safety margin or whether future growth expectations are already priced into the stock.  

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