Kaiser Aluminum (KALU)
NASDAQ:KALU
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Kaiser Aluminum
(NASDAQ:KALU)
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Rating:65Neutral
Price Target:
$123.00
▲(4.62% Upside)
Action:ReiteratedDate:02/20/26
The score is driven primarily by improving fundamentals and a stronger balance-sheet profile, tempered by weak recent free-cash-flow conversion. Support comes from constructive technicals and a positive 2026 outlook on the earnings call, while valuation appears fair with a moderate dividend yield.
Positive Factors
Margin expansion & record EBITDA
Margin expansion to a 21.3% conversion margin and record adjusted EBITDA reflect sustainable improvements in pricing, product mix, and operational execution. Higher conversion margins from value‑added products reduce earnings cyclicality and provide structural earnings resilience across cycles.
Negative Factors
Weak free cash flow conversion
Negative free cash flow despite higher reported earnings indicates weak cash conversion and volatility. Persistent FCF shortfalls constrain the firm's ability to self‑fund capex, repurchases or extraordinary dividends and increase reliance on external liquidity over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion & record EBITDA
Margin expansion to a 21.3% conversion margin and record adjusted EBITDA reflect sustainable improvements in pricing, product mix, and operational execution. Higher conversion margins from value‑added products reduce earnings cyclicality and provide structural earnings resilience across cycles.
Read all positive factors
Kaiser Aluminum (KALU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13B
Dividend Yield2.64%
Average Volume (3M)245.04K
Price to Earnings (P/E)16.5
Beta (1Y)1.66
Revenue Growth7.69%
EPS Growth91.86%
CountryUS
Employees3,900
SectorBasic Materials
Sector Strength58
IndustryAluminum
Share Statistics
EPS (TTM)1.53
Shares Outstanding16,210,443
10 Day Avg. Volume278,125
30 Day Avg. Volume245,036
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)2.25
Price to Sales (P/S)0.55
P/FCF Ratio-72.83
Enterprise Value/Market Cap1.51
Enterprise Value/Revenue0.96
Enterprise Value/Gross Profit9.23
Enterprise Value/Ebitda10.01
Forecast
1Y Price Target
$122.00Price Target Upside3.77% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)7.99
Revenue Forecast (FY)$3.93B
Kaiser Aluminum Business Overview & Revenue Model
Company Description
Kaiser Aluminum Corporation engages in manufacture and sale of semi-fabricated specialty aluminum mill products in the United States and internationally. The company offers rolled, extruded, and drawn aluminum products used for aerospace and defen...
How the Company Makes Money
Kaiser Aluminum primarily makes money by manufacturing and selling value-added, semi-fabricated aluminum products to customers across its served end markets. Revenue is generated from contracted and spot sales of products such as aerospace and ind...
Kaiser Aluminum Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents a largely positive outlook: Kaiser delivered record adjusted EBITDA, significant margin expansion (+470 bps), improved net income and leverage, successful refinancing, and commissioning of strategic assets (coating line, Trentwood Phase V). Several end markets (packaging, general engineering) showed growth, and management expects 2026 to be a year of harvesting returns with conversion revenue +5%–10% and EBITDA +5%–15%. Near-term headwinds include a 5% decline in total shipments, a notable 14% decline in aerospace conversion revenue in 2025, $47 million of nonrecurring start-up costs, working capital pressure from rising metal prices ($168 million usage), and planned automotive outages and incremental CapEx. Management articulated clear plans to drive operational improvements and limit reliance on metal price tailwinds. On balance, highlights (record profitability, margin gains, refinancing, asset commissioning, positive 2026 outlook) outweigh the lowlights (shipment declines, start-up costs, metal price and working capital exposure), supporting a positive sentiment.Positive Updates
Record EBITDA and Margin Expansion
Adjusted EBITDA of $310 million for 2025, up ~$69 million YoY; adjusted EBITDA margin on conversion revenue improved to 21.3% (+470 basis points vs. 16.6% in 2024). Management described 2025 as record EBITDA and second-half margins improving to ~24%.
Negative Updates
Overall Shipments Decline
Total shipments were ~1.1 billion pounds, down ~5% (down ~64 million pounds) year-over-year, reflecting weakness in certain end markets and start-up impacts.
Read all updates
Q4-2025 Updates
Positive
Negative
Record EBITDA and Margin Expansion
Adjusted EBITDA of $310 million for 2025, up ~$69 million YoY; adjusted EBITDA margin on conversion revenue improved to 21.3% (+470 basis points vs. 16.6% in 2024). Management described 2025 as record EBITDA and second-half margins improving to ~24%.
Read all positive updates
Company Guidance
Kaiser’s 2026 guidance calls for record conversion revenue and EBITDA, with company-wide conversion revenue growth of 5%–10% and EBITDA growth of 5%–15%; key end‑market targets include aerospace shipments +10%–15% and conversion revenue +5%–10%, packaging shipments +5%–10% and conversion revenue +15%–20% (coated volumes now ~75% and expected to drive a ~300–400 bp company margin uplift), general engineering shipments and conversion revenue +3%–5%, and automotive shipments/conversion revenue down ~5%–10% (reflecting planned retooling outages). Financial and cash metrics include capital expenditures of $120M–$130M, free cash flow of $120M–$140M (subject to metal prices/working capital), an effective tax rate in the mid‑20% range with 2026 cash tax payments of $5M–$7M, metal assumptions aligned to current futures, and an emphasis on margin expansion and debt reduction after completing major growth investments.Kaiser Aluminum Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
70
Positive
Cash Flow
45
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.37B | 3.02B | 3.09B | 3.43B | 2.62B |
| Gross Profit | 319.90M | 332.90M | 332.10M | 247.70M | 273.90M |
| EBITDA | 322.60M | 223.60M | 211.80M | 117.30M | 117.00M |
| Net Income | 112.50M | 46.80M | 47.20M | -29.60M | -18.50M |
Balance Sheet | |||||
| Total Assets | 2.56B | 2.31B | 2.27B | 2.29B | 2.42B |
| Cash, Cash Equivalents and Short-Term Investments | 7.00M | 18.40M | 82.40M | 57.40M | 303.20M |
| Total Debt | 1.12B | 1.09B | 1.08B | 1.09B | 1.09B |
| Total Liabilities | 1.74B | 1.65B | 1.62B | 1.66B | 1.73B |
| Stockholders Equity | 826.10M | 668.00M | 652.20M | 631.20M | 692.50M |
Cash Flow | |||||
| Free Cash Flow | -25.50M | -13.70M | 68.70M | -205.60M | 21.40M |
| Operating Cash Flow | 111.40M | 167.10M | 211.90M | -63.10M | 79.40M |
| Investing Cash Flow | -77.80M | -174.60M | -128.20M | -125.80M | -665.80M |
| Financing Cash Flow | -44.60M | -55.30M | -54.30M | -56.80M | 109.10M |
Kaiser Aluminum Technical Analysis
Positive
117.57
Price Trends
127.04
Positive
117.67
Positive
98.52
Positive
Market Momentum
-0.84
Negative
61.04
Neutral
94.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KALU, the sentiment is Positive. The current price of 117.57 is below the 20-day moving average (MA) of 119.05, below the 50-day MA of 127.04, and above the 200-day MA of 98.52, indicating a bullish trend. The MACD of -0.84 indicates Negative momentum. The RSI at 61.04 is Neutral, neither overbought nor oversold. The STOCH value of 94.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KALU.
Kaiser Aluminum Risk Analysis
Kaiser Aluminum disclosed 38 risk factors in its most recent earnings report. Kaiser Aluminum reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We rely on third parties to provide certain services that are critical to our operation. Q4, 2025
Kaiser Aluminum Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $18.87B | 12.08 | 18.80% | 0.75% | 20.08% | ― | |
67 Neutral | $3.10B | 34.48 | 8.14% | 0.43% | 3.93% | -73.94% | |
65 Neutral | $2.13B | 16.51 | 14.22% | 2.64% | 7.69% | 91.86% | |
65 Neutral | $6.19B | 88.30 | 5.54% | ― | 20.15% | -72.89% | |
64 Neutral | $3.73B | 9.65 | 29.48% | ― | 8.48% | 12.10% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
KALU
Kaiser Aluminum
130.39
81.23
165.24%
AA
Alcoa
71.01
46.69
192.02%
MTRN
Materion
148.86
75.52
102.98%
CENX
Century Aluminum
64.54
49.56
330.70%
CSTM
Constellium
27.83
19.84
248.31%
Kaiser Aluminum Corporate Events
Dividends
Kaiser Aluminum Declares Quarterly Cash Dividend for Shareholders
Positive
Jan 13, 2026
On January 13, 2026, Kaiser Aluminum Corporation announced that its board of directors had declared a quarterly cash dividend of $0.77 per share on its common stock, payable on February 13, 2026, to shareholders of record as of January 23, 2026. T...
Executive/Board Changes
Kaiser Aluminum Announces Executive Sales and Marketing Transition
Neutral
Jan 7, 2026
Kaiser Aluminum Corporation has implemented a planned leadership transition in its sales and marketing organization, appointing Hugh (Jack) J. Barger, III as Executive Vice President – Sales and Marketing effective January 1, 2026, as part o...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.