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Century Aluminum upgraded at BMO, as tariffs to lift volumes and premiums

Published 03/12/2018, 11:48 AM
© Reuters.  Century Aluminum upgraded at BMO, as tariffs to lift volumes and premiums
CENX
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  • Century Aluminum (CENX +4.9%) shoots higher after BMO Capital upgrades shares to Outperform from Market Perform with a $28 price target, raised from $20, saying the Trump administration's steel and aluminum tariffs will lead to higher Midwest premiums.
  • BMO believes CENX shares do not reflect the valuation implications of higher company-specific volumes and the firm's views of higher-for-longer Midwest premiums, estimating a "clearing Midwest premium" of ~$0.20/lb. vs. the spot price of $0.17/lb. and historical price of $0.08.
  • BMO projects CENX annual EBITDA of more than $450M once volumes and premiums reset, with an incremental EBITDA opportunity from the higher Midwest premium of $50M-$60M.
  • Now read: Trump's Steel Tariff Proposal May Not Come To Pass


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