Century Aluminum Co. (NASDAQ:CENX) [Trend Analysis] was upgraded yesterday by analysts at Standpoint research from hold to buy. As our analysis shows, the stock is superbly priced as it appears underpriced when looking both at forward earnings and also longer term growth.
Century Aluminum Co. (NASDAQ:CENX) last traded at $14.61 after moving up 5.38% for the trading day.
CENX is trading with a trailing 12 month P/E multiple of 12.70 and an estimated forward P/E multiple of 5.90. The stock has an estimated 5 year annual growth of 15.30% and a PEG multiple of 0.83.
From a value investor perspective, as mentioned Century Aluminum Co. trades on an estimated forward P/E multiple of 5.90. The current estimated forward P/E ratio for the market as a whole is approximately 19.00. Therefore, for value investors CENX appears to be underpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Century Aluminum Co. (NASDAQ:CENX). This PEG multiple takes into account the expected long term growth in earnings of Century Aluminum Co. rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of CENX being 0.83, we consider Century Aluminum Co. to likely be underpriced.
The mean analyst 12 month target price for Century Aluminum Co. (NASDAQ:CENX) is currently $22.63 or 54.95% above the current price. Additionally, the stock has been as high as $31.75 and as low as $11.94 in the last 52 weeks. Analysts are estimating that CENX will report earnings per share of $0.46 next quarter.