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Kaiser Aluminum Corp (KALU)
NASDAQ:KALU
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Kaiser Aluminum
(NASDAQ:KALU)
68Neutral
Positive Factors
Automotive market positioning
Confidence for the full year stems from a focus on high-demand SUV and light truck platforms and new programs, positioning Kaiser to outperform the overall market.
Expansion and revenue growth
The new Warrick roll coat line is set to open, supporting a 20%-25% year-over-year increase in conversion revenue.
Trade dynamics
Kaiser is benefiting from trade policies, providing a favorable environment for domestic supply.
Negative Factors
Aerospace supply disruptions
Aerospace and high-strength revenue declined due to short-term disruptions in aircraft OEM supply chains, with an expected revenue decline of 5-7% year-over-year in FY25.
Automotive tariffs
Kaiser's automotive exposure is vulnerable to potential tariffs and increased uncertainty.
Price target reduction
The price target for Kaiser Aluminum has been reduced from $100 to $74, indicating a less optimistic outlook.
Kaiser Aluminum (KALU) vs. S&P 500 (SPY)
Market Cap
$1.12B
Dividend Yield4.62%
Average Volume (3M)220.24K
Price to Earnings (P/E)25.9
Beta (1Y)1.79
Revenue Growth1.56%
EPS Growth-22.11%
CountryUS
Employees3,900
SectorBasic Materials
Sector Strength59
IndustryAluminum
Share Statistics
EPS (TTM)2.67
Shares Outstanding16,154,375
10 Day Avg. Volume237,668
30 Day Avg. Volume220,243
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.83
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.15
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$69.00Price Target Upside-0.23% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Kaiser Aluminum Business Overview & Revenue Model
Company DescriptionKaiser Aluminum Corporation (NASDAQ: KALU) is a leading producer of semi-fabricated specialty aluminum products, primarily serving the aerospace, automotive, and industrial sectors. Established over 70 years ago, the company operates a network of manufacturing facilities in North America, providing high-quality aluminum sheet, plate, extrusions, and other value-added products. Kaiser Aluminum's expertise in technology and engineering allows it to deliver customized solutions that meet the specific needs of its diverse clientele.
How the Company Makes MoneyKaiser Aluminum makes money by producing and selling semi-fabricated aluminum products to various industries, including aerospace, automotive, and general industrial markets. The company's revenue streams are largely derived from the sale of aluminum sheet and plate, extruded products, and engineered components. A significant portion of its earnings comes from long-term contracts with major customers in the aerospace and automotive sectors, where high performance and precision are critical. Additionally, the company benefits from strategic partnerships and its ability to leverage advanced manufacturing technologies to produce high-margin, value-added products that meet specific customer requirements.
Kaiser Aluminum Financial Statement Overview
Summary
Kaiser Aluminum's financial performance is characterized by improvements in operational efficiency and leverage reduction. The gross profit margin has improved, but the net profit margin and free cash flow generation face challenges. The company's debt reduction and stable equity levels provide a stable financial base.Income Statement
Kaiser Aluminum has shown a mixed performance in its income statement. The gross profit margin improved significantly in TTM (Trailing-Twelve-Months) to 31.3% from 11.0% in the prior year, indicating better cost management. However, net profit margin decreased slightly to 1.4% from 1.5%. Revenue growth over the last year (from 2024 to TTM 2025) is moderate at 1.32%, showing some level of business expansion. EBIT and EBITDA margins remain relatively low but are improving, signaling a potential turnaround in operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position, with a debt-to-equity ratio improving significantly to 0.03 in TTM 2025 from 1.61 in 2023, which reduces leverage risk. The equity ratio is stable at around 31.0%, indicating a consistent reliance on equity financing. Return on equity (ROE) is moderate at 5.8%, reflecting average returns for shareholders.60
Neutral
Cash Flow
The cash flow statement indicates challenges with generating free cash flow, which is negative at -$47 million in TTM 2025. The operating cash flow to net income ratio is strong at 2.37, showing solid cash generation from operations. However, the free cash flow to net income ratio is negative, reflecting high capital expenditures that weigh on free cash performance. Free cash flow growth is negative, suggesting potential cash strain.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.02B | 3.09B | 3.43B | 2.62B | 1.17B | Gross Profit |
| 332.90M | 332.10M | 140.80M | 182.40M | 179.20M | EBIT |
| 87.70M | 95.80M | -73.80M | -66.80M | 35.00M | EBITDA |
| 223.60M | 211.80M | 131.50M | 151.00M | 136.60M | Net Income Common Stockholders |
| 46.80M | 47.20M | -29.60M | -18.50M | 28.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 18.40M | 82.40M | 57.40M | 303.20M | 780.30M | Total Assets |
| 2.31B | 2.27B | 2.29B | 2.42B | 1.86B | Total Debt |
| 1.08B | 1.08B | 1.07B | 1.08B | 863.70M | Net Debt |
| 1.06B | 996.70M | 1.02B | 773.90M | 83.40M | Total Liabilities |
| 1.65B | 1.62B | 1.66B | 1.73B | 1.13B | Stockholders Equity |
| 668.00M | 652.20M | 631.20M | 692.50M | 732.40M |
| Cash Flow | Free Cash Flow | |||
| -13.70M | 68.70M | -205.60M | 21.40M | 155.00M | Operating Cash Flow |
| 167.10M | 211.90M | -63.10M | 79.40M | 206.90M | Investing Cash Flow |
| -174.60M | -128.20M | -125.80M | -665.80M | 26.90M | Financing Cash Flow |
| -55.30M | -54.30M | -56.80M | 109.10M | 281.90M |
Kaiser Aluminum Technical Analysis
Positive
69.16
Price Trends
62.75
Positive
66.91
Negative
70.04
Negative
Market Momentum
0.83
Negative
65.41
Neutral
94.84
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 69.16 is above the 20-day moving average (MA) of 56.37, above the 50-day MA of 62.75, and below the 200-day MA of 70.04, indicating a neutral trend. The MACD of 0.83 indicates Negative momentum. The RSI at 65.41 is Neutral, neither overbought nor oversold. The STOCH value of 94.84 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 39 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 0 New Risks
Kaiser Aluminum Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.12B | 25.86 | 6.16% | 4.62% | 1.56% | -22.11% | |
64 Neutral | $1.57B | 5.22 | 64.15% | ― | 1.60% | ― | |
63 Neutral | $6.41B | 88.27 | 17.53% | 1.63% | 22.45% | ― | |
63 Neutral | $1.59B | 24.65 | 7.93% | ― | -2.29% | -48.13% | |
58 Neutral | $829.98M | ― | -41.03% | 2.55% | -2.75% | -339.59% | |
58 Neutral | $761.52M | ― | -20.22% | ― | 6.28% | 29.57% | |
49 Neutral | $1.95B | -1.37 | -21.43% | 3.74% | 0.84% | -29.84% |
* Basic Materials Sector Average
Performance Comparison
KALU
Kaiser Aluminum
69.16
-22.92
-24.89%
AA
Alcoa
25.53
-10.83
-29.79%
CENX
Century Aluminum
17.29
0.48
2.86%
RDUS
Schnitzer Steel Industries
29.43
12.32
72.00%
CSTM
Constellium
11.14
-9.07
-44.88%
NEXA
Nexa Resources SA
5.66
-1.67
-22.78%
Kaiser Aluminum Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 18.85%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
Kaiser Aluminum demonstrated resilience with strong financial performance and strategic investment progress despite challenges in aerospace revenue and overall conversion revenue decline. The highlights, particularly in financial metrics and investment projects, outweigh the lowlights.Q1-2025 Updates
Positive Updates
Strong Start to 2025
Despite market volatility, Kaiser Aluminum's end markets are tracking expectations, with improved full-year outlook due to solid Q1 results.
Major Investments Progressing
The fourth coating line at Warrick rolling mill is moving into customer qualification, while Trentwood Phase VII project progresses smoothly. These investments are expected to drive a step change in EBITDA and margin performance.
Solid Financial Performance
Adjusted EBITDA for Q1 was $73 million, a $19 million increase from the prior year. Adjusted EBITDA as a percentage of conversion revenue improved by 550 basis points to 20.2%.
Positive Cash Flow and Liquidity
Generated $57 million cash flow from operations; with $38 million in capital expenditures, resulting in approximately $19 million in free cash flow. Strong liquidity position of $577 million with no borrowings under revolving credit.
Dividend Confidence
Board of Directors declared a quarterly dividend of $0.77 per common share, reinforcing confidence in long-term strategy.
Negative Updates
Aerospace Revenue Decline
Aerospace and High Strength conversion revenue was $121 million, down $16 million or approximately 12%, due to commercial aircraft OEM order pattern disruptions.
Packaging Shipments Decline
Packaging shipments declined 9% due to a reduction in bare products as the company pivots towards higher volumes of coated material.
Overall Conversion Revenue Decrease
Conversion revenue for Q1 was $363 million, a decrease of approximately $4 million or 1% compared to the prior year period.
Company Guidance
During the Kaiser Aluminum Corporation's first quarter 2025 earnings call, the company provided updated guidance reflecting a positive outlook for the remainder of the year. The company reported a conversion revenue of $363 million for the first quarter, a slight decrease of 1% from the previous year, and adjusted EBITDA of $73 million, up $19 million year-over-year, with an EBITDA margin improvement of approximately 550 basis points to 20.2%. They project a year-over-year growth in conversion revenue of 5% to 10% for 2025 and have raised their full-year EBITDA expectations by 5% to 10% above the re-casted 2024 adjusted EBITDA of $241 million. Capital expenditures for the year are projected to be between $120 million and $130 million, with an expected free cash flow generation of over $100 million. The company also declared a quarterly dividend of $0.77 per share, highlighting confidence in their long-term strategy. Kaiser Aluminum anticipates a strong performance driven by strategic investments, particularly in their new coating line at the Warrick rolling mill and the Trentwood Phase VII expansion, which are expected to significantly enhance their production capacity and margins.Kaiser Aluminum Corporate Events
Executive/Board Changes
Kaiser Aluminum Announces Leadership Changes for 2025
Positive
Jan 6, 2025
Kaiser Aluminum Corporation announced the retirement of Jack A. Hockema as Executive Chair, effective January 1, 2025, with CEO Keith A. Harvey appointed as Chairman of the Board. Kimberly T. Glas has been appointed as a new director, filling the vacancy left by Mr. Hockema. Ms. Glas brings over 20 years of experience in government policy development and advocacy, particularly with labor unions, and will serve on the Board’s audit and sustainability committees. This leadership transition is expected to continue the company’s legacy of operational excellence and enhance stakeholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.