Key Takeaways
- Kaiser Aluminum shares fell 23% today after third-quarter adjusted EPS of $1.89 missed estimates and its adjusted EBITDA margin slid to 19.1% from 23.2%.
- Most of that margin drop traces to a roughly $29 million swing in metal price lag from a year ago, which Kaiser expected, while conversion revenue grew 25%.
- Operational problems, including a planned plant outage and start-up costs, cost about 6.4 points of margin and helped push 2026 adjusted EBITDA growth toward the low end of Kaiser’s 45% to 55% range.
- TTM Technologies, Lam Research and Nokia also fell sharply today on reports that only held the line, and Forgent Power Solutions sank after its CFO stepped down.
Kaiser Aluminum (KALU) sank 23% today after third-quarter earnings missed estimates.
Most of Kaiser’s margin drop comes from a swing it saw coming. The “operational challenges” are the part to watch.
A $29 million swing
Adjusted EPS of $1.89 edged past last year’s $1.86 but missed estimates, and its adjusted EBITDA margin slid to 19.1% from 23.2%.
Chairman, President and CEO Keith Harvey blamed metal price lag, the gap between the aluminum price Kaiser pays and the market’s, which flattered last year’s quarter:
“Despite this headwind, as well as other operational challenges that impacted third quarter margins, the business delivered meaningful underlying improvement year over year.”
The numbers back him up. Metal price lag added about $28 million to EBITDA a year ago and cost about $1 million this quarter, a $29 million swing. Kaiser still grew adjusted EBITDA 3% to $84 million, as conversion revenue jumped 25% to $439 million.
But the operational problems cost about 6.4 points of margin: higher metal costs from using less scrap, a planned outage at its Bellwood plant, and roll coat start-up costs in packaging. Since Harvey called the lag’s disappearance expected, those look like the bigger surprise.
They’re part of why Kaiser now sees 2026 adjusted EBITDA growth near the low end of its 45% to 55% range.
TIKR tracks 5 analysts on Kaiser Aluminum. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Kaiser Aluminum, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Kaiser Aluminum’s Analyst Ratings
Already cheap, now cheaper
Heading into the report, analysts expected Kaiser’s earnings to more than double this year…
A low-end finish should trim that 2026 figure.
And the stock already traded at 14x forward earnings at Wednesday’s close, against a five-year average of 20x…
After today’s drop, it’s closer to 11x, below even its five-year low of 13x.
Nobody got credit for holding the line
Kaiser had company. TTM Technologies (TTMI) fell 29% despite a record quarter, on an outlook that only matched estimates. Lam Research (LRCX) dropped 11% on an in-line guide as well.
My take: this selloff looks overdone. The biggest hit was expected, much of the rest came from a planned outage and start-up costs, and the stock trades below its cheapest multiple in five years.
Of course, the operational problems have to clear. Fred Stephan takes over as CEO on Nov. 1, and his first report early next year will show whether they have.
So what is Kaiser Aluminum stock actually worth?
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