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Having a cunning edge in the fabrication of specialty aluminum products, Kaiser Aluminum (KALU - Free Report) is one of the most intriguing industrial products stocks at the moment. To that point, Kaiser Aluminum’s stock sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.
Increasing demand for Kaiser Aluminum’s highly engineered products and solutions for the aerospace industry are very appealing at the moment with the company’s reach extending to automotive extrusions, food and beverage packaging, and other industrial applications.
Q4 Profit Surprise: Foreshadowing the anticipation of a lofty rebound in Kaiser Aluminum’s bottom line was much stronger-than-expected Q4 results in February.
Driving what turned out to be a surprise quarterly profit was record sales of $237 million in Kaiser Aluminum’s Aerospace/High-Strength Applications segment. Net sales of $722 million beat Q4 estimates by 3% despite dipping from $766 million a year ago.
Impressively, Kaiser Aluminum posted Q4 adjusted net income of $10 million or $0.60 a share which blasted expectations that called for an adjusted loss of -$0.34 a share. Even better, Q4 earnings soared from an adjusted loss of -$1.66 a share in the comparative quarter.
Image Source: Zacks Investment Research
Soaring FY24 EPS Estimates: Following the eye-catching Q4 earnings beat, EPS estimates have climbed 20% over the last 30 days for Kaiser Aluminum’s current fiscal 2024. Plus, FY25 EPS estimates are up 1% in the last month.
Image Source: Zacks Investment Research
EBITDA & EPS Rebound: Kaiser Aluminum ended FY23 with annual earnings at $2.74 per share compared to an adjusted loss of -$1.86 a share in 2022. Notably, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 48% to $210 million.
More importantly, Kaiser Aluminum expects its adjusted EBITDA margins to improve another 70-170 basis points in FY24 which would put an end to the up-and-down cycle the company has faced in recent years due to higher operating costs.
Image Source: Zacks Investment Research
According to Zacks estimates, Kaiser Aluminum’s EPS is projected to leap another 32% this year to $3.59 per share. Better still, annual earnings are forecasted to almost double in FY25 to $6.55 per share.
Image Source: Zacks Investment Research
Reasonable Valuation & Sizable Dividend: With EPS estimates on the rise KALU shares trade at a more reasonable 21.2X forward earnings multiple. This is slightly beneath the S&P 500’s 21.7X and a discount to its Zacks Metal Products-Procurement and Fabrication industry average of 26X with some of the other notable names in the space including ESAB Corporation (ESAB - Free Report) and Northwest Pipe Company (NWPX - Free Report) .
Image Source: Zacks Investment Research
Adding more value is that Kaiser Aluminum’s stock trades at just 0.4X sales and offers a 4.04% annual dividend yield which impressively tops the industry average of 1.93% and the S&P 500’s 1.3%.
Image Source: Zacks Investment Research
Bottom Line
Following very pleasant Q4 results last month Kaiser Aluminum’s stock is starting to check the boxes. In addition to the strong buy rating KALU shares also have an overall “A” Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
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Bull of the Day: Kaiser Aluminum (KALU)
Having a cunning edge in the fabrication of specialty aluminum products, Kaiser Aluminum (KALU - Free Report) is one of the most intriguing industrial products stocks at the moment. To that point, Kaiser Aluminum’s stock sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.
Increasing demand for Kaiser Aluminum’s highly engineered products and solutions for the aerospace industry are very appealing at the moment with the company’s reach extending to automotive extrusions, food and beverage packaging, and other industrial applications.
Q4 Profit Surprise: Foreshadowing the anticipation of a lofty rebound in Kaiser Aluminum’s bottom line was much stronger-than-expected Q4 results in February.
Driving what turned out to be a surprise quarterly profit was record sales of $237 million in Kaiser Aluminum’s Aerospace/High-Strength Applications segment. Net sales of $722 million beat Q4 estimates by 3% despite dipping from $766 million a year ago.
Impressively, Kaiser Aluminum posted Q4 adjusted net income of $10 million or $0.60 a share which blasted expectations that called for an adjusted loss of -$0.34 a share. Even better, Q4 earnings soared from an adjusted loss of -$1.66 a share in the comparative quarter.
Image Source: Zacks Investment Research
Soaring FY24 EPS Estimates: Following the eye-catching Q4 earnings beat, EPS estimates have climbed 20% over the last 30 days for Kaiser Aluminum’s current fiscal 2024. Plus, FY25 EPS estimates are up 1% in the last month.
Image Source: Zacks Investment Research
EBITDA & EPS Rebound: Kaiser Aluminum ended FY23 with annual earnings at $2.74 per share compared to an adjusted loss of -$1.86 a share in 2022. Notably, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 48% to $210 million.
More importantly, Kaiser Aluminum expects its adjusted EBITDA margins to improve another 70-170 basis points in FY24 which would put an end to the up-and-down cycle the company has faced in recent years due to higher operating costs.
Image Source: Zacks Investment Research
According to Zacks estimates, Kaiser Aluminum’s EPS is projected to leap another 32% this year to $3.59 per share. Better still, annual earnings are forecasted to almost double in FY25 to $6.55 per share.
Image Source: Zacks Investment Research
Reasonable Valuation & Sizable Dividend: With EPS estimates on the rise KALU shares trade at a more reasonable 21.2X forward earnings multiple. This is slightly beneath the S&P 500’s 21.7X and a discount to its Zacks Metal Products-Procurement and Fabrication industry average of 26X with some of the other notable names in the space including ESAB Corporation (ESAB - Free Report) and Northwest Pipe Company (NWPX - Free Report) .
Image Source: Zacks Investment Research
Adding more value is that Kaiser Aluminum’s stock trades at just 0.4X sales and offers a 4.04% annual dividend yield which impressively tops the industry average of 1.93% and the S&P 500’s 1.3%.
Image Source: Zacks Investment Research
Bottom Line
Following very pleasant Q4 results last month Kaiser Aluminum’s stock is starting to check the boxes. In addition to the strong buy rating KALU shares also have an overall “A” Zacks Style Scores grade for the combination of Value, Growth, and Momentum.