Kaiser Aluminum: Strong Buy Rating Backed by Positive FY25 Outlook and Sector Recovery

Kaiser Aluminum (KALU – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Josh Sullivan from Benchmark Co. maintained a Buy rating on the stock and has a $74.00 price target.

Josh Sullivan has given his Buy rating due to a combination of factors that highlight Kaiser Aluminum’s positive outlook. The company has raised its full-year FY25 EBITDA guidance, which is a strong indicator of its financial health despite broader macroeconomic challenges. Kaiser Aluminum’s General Engineering segment is benefiting from favorable trade dynamics, while the aerospace sector is showing signs of recovery as the destocking cycle nears its end. Additionally, the new Warrick roll coat line is expected to contribute significantly to revenue growth once it reaches full operational capacity in the second half of FY25.
Furthermore, the company’s performance in the first quarter of FY25 exceeded expectations, with adjusted EBITDA surpassing the Street’s estimates. Although top-line sales were slightly below expectations, the outlook for conversion revenues and EBITDA remains strong, with anticipated growth in both areas. The aerospace sector, despite short-term supply chain disruptions, is poised for recovery as production rates for key aircraft models increase. The packaging and automotive segments also show promising growth prospects, supported by improved product mixes and strategic focus on high-demand vehicle platforms. These factors collectively underpin Josh Sullivan’s Buy rating for Kaiser Aluminum.