Century Aluminum (CENX) stock surged 8.77% in premarket trading on Monday, following an analyst upgrade from BMO Capital Markets. The investment bank raised its rating on CENX to Outperform from Market Perform, setting a new price target of $22 per share.
The bullish call from BMO Capital Markets appears to be the primary driver behind Century Aluminum's premarket rally. BMO cited the company's favorable valuation following a recent sell-off and its strong positioning to benefit from rising aluminum prices and the upcoming increase in Section 232 aluminum tariffs to 25% from 10%.
As the largest primary aluminum producer in the U.S., Century Aluminum is poised to benefit from the tariff hike, which could significantly boost its earnings and EBITDA. Additionally, BMO highlighted the potential restart of the company's idled Hawesville smelter, which could generate up to $250 million in EBITDA at current aluminum prices.
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