Analysts Are Bullish on Top Materials Stocks: Century Aluminum (CENX), Archrock (AROC)

By Austin Angelo

There’s a lot to be optimistic about in the Materials sector as 2 analysts just weighed in on Century Aluminum (CENXResearch Report) and Archrock (AROCResearch Report) with bullish sentiments.

Century Aluminum (CENX)

B.Riley FBR analyst Lucas Pipes maintained a Buy rating on Century Aluminum today and set a price target of $15. The company’s shares opened today at $9.25, close to its 52-week low of $6.54.

Pipes wrote:

“Aluminum (CENX) reported 4Q18 adjusted EBITDA of $(18.1)M, beating consensus estimates of $(22.8)M but slightly missing our estimate of $(14.1)M. Compared to the prior quarter, adjusted EBITDA was largely impacted by lower LME and regional premium prices. In addition to reporting 4Q18 results, Century released updated guidance for FY19. The company is guiding to 850K Mt of aluminum shipments in 2019 with 655K Mt coming from its US operations. The biggest surprise from the company’s guidance was high alumina costs of $500/Mt in 1Q19. Management explained this was due to the company carrying greater levels of alumina inventory which prolonged the time it takes for the material to flow through its FIFO accounting standards.”

According to TipRanks.com, Pipes is a 3-star analyst with an average return of 1.4% and a 49.4% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, CONSOL Coal Resources LP, and Teck Resources Limited.

Century Aluminum has an analyst consensus of Moderate Buy, with a price target consensus of $11.33.

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Archrock (AROC)

In a report released today, Tom Curran from B.Riley FBR reiterated a Buy rating on Archrock. The company’s shares opened today at $10.46.

Curran noted:

“In light of AROC’s big 4Q beat, stronger-than-expected 2019 guidance, and bullish update on compression’s cyclical and secular fundamentals (which echoed that of fellow heavyweight USAC), we are lifting our adjusted EBITDA/EPS for (1) 2019 from $390.5M/$0.37 to $394.5M/ $0.69, and (2) 2020 from $425.0M/$0.65 to $430.9M/$0.80. We believe our thesis is proving out; see a clear catalyst in AROC’s promised next dividend increase, which should be a raise of 10-to-15% and occur by the end of Jul-19; and reiterate our Buy rating and $16 price target.”

According to TipRanks.com, Curran is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -9.1% and a 38.2% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Tetra Technologies, Forum Energy Tech, and USA Compression.

The the analyst consensus on Archrock is currently a Hold rating.

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