Highlights

  • Kaiser Aluminum shows 104.81% basic EPS growth, a P/E of 8.30 and PEG of 0.60.
  • Third quarter net income was $31.0 million, against $39.5 million a year earlier.
  • Third quarter net sales were $1,214.5 million, against $843.5 million.
  • Kaiser expects 2026 Adjusted EBITDA growth toward the low end of 45% to 55%.

One-year earnings growth of 104.81%, paired with a trailing twelve-month P/E of 8.30 and an expected-basis PEG of 0.60, puts Kaiser Aluminum (NASDAQ:KALU) among undervalued growth stocks, with shares trading at USD 119.08 on October 28, 2026, up 2.43%. Alongside those figures, the aluminum mill products maker issued $500.0 million of 5.875% Senior Notes in November 2025, declared a quarterly dividend of $0.77 per common share on October 13, and reported third quarter 2026 net income of $31.0 million on October 22.

Based in Franklin, Tennessee, and incorporated in Delaware, Kaiser Aluminum manufactures semi-fabricated specialty aluminum mill products, including flat-rolled plate, sheet and coil, extruded and drawn products, and certain cast products. It serves four end markets: Aero/HS Products, Packaging, GE Products and Automotive Extrusions. The company operates one reportable segment, with production facilities in the United States and Canada, and employed approximately 3,800 people at September 30, 2026.

Growth: Third Quarter Earnings, Net Sales and End Markets

Net income was $31.0 million in the third quarter against $39.5 million, and $190.3 million for the nine months against $84.3 million. Basic earnings per share were $1.90 against $2.44, and diluted earnings per share were $1.84 against $2.38. Nine-month basic earnings per share were $11.67 against $5.22. Operating income was $55.2 million against $48.8 million.

Net sales were $1,214.5 million against $843.5 million, up 44%, and $3,577.9 million for the nine months against $2,444.0 million. The company said the increase reflected a $0.93 per pound (30%) increase in the average realized sales price and a 30.0 million pound (11%) increase in shipment volume. Conversion Revenue, a non-GAAP measure, was $439.1 million. Adjusted EBITDA, also non-GAAP, was $84.0 million against $81.3 million, and $378.8 million for the nine months against $222.4 million.

Third quarter net sales were $291.9 million in Aero/HS Products against $182.2 million and $561.4 million in Packaging against $393.9 million.

Valuation: P/E of 8.30, PEG of 0.60 and Cash Generation

The P/E ratio of 8.30 is measured on trailing twelve-month earnings, and the PEG ratio of 0.60 on expected growth. Net cash provided by operating activities was $248.1 million for the nine months against $132.0 million. Total stockholders' equity was $975.5 million at September 30, 2026, against $826.1 million at December 31, 2025. The nine-month figure included a $157.2 million increase in accounts payable and a $123.4 million increase in inventory.

Capital Returns, Debt and Liquidity

The company has paid a quarterly cash dividend since the second quarter of 2007. It declared $0.77 per share in each quarter of 2026 to date and paid $12.8 million in the third quarter. The dividend declared October 13 is expected to total approximately $12.8 million, payable on or about November 13, 2026. The company has completed no share repurchases since March 2020, and $93.1 million remained available under its $100.0 million authorization at September 30, 2026.

Total liquidity was $687.2 million against $547.2 million at December 31, 2025, made up of $117.3 million of cash and $569.9 million of borrowing availability under the Revolving Credit Facility. The facility had no outstanding borrowings at September 30, 2026 or October 19, 2026,. Total debt was $1,050.0 million, made up of $550.0 million of 4.50% Senior Notes due June 2031 and $500.0 million of 5.875% Senior Notes due March 2034. The company expects 2026 capital spending of approximately $130.0 million.

Disclosed Risks and Outlook: Metal Costs, Outages and 2026 Targets

Third quarter net income was lower than a year earlier, and the prior-year quarter included other income, net of $11.4 million. Metal price lag had a negative effect of $1.0 million in the quarter against a positive effect of $28.0 million a year earlier. The company said Adjusted EBITDA was partly offset by higher metal consumption costs from lower scrap utilization, higher operating costs from the ramp-up of its new coating line and the planned partial outage at Bellwood, and higher freight costs. The company reported no material legal developments since December 31, 2025.

For the remainder of 2026, the company expects Conversion Revenue growth toward the high end of its 10% to 15% outlook. It is maintaining its Adjusted EBITDA growth outlook of 45% to 55% compared with 2025, with results now expected toward the lower end of the range given planned outages, execution performance, customer year-end inventory alignment and metal-related headwinds.

On the third quarter 2026 earnings call, management said it is revising its Packaging shipment outlook to growth of 5% to 10% from 10% to 15% and its Automotive Extrusions shipment outlook to a decline of 5% to 10%. It also said Fred Stephan becomes Chief Executive Officer on November 1, with Keith Harvey moving to Executive Chair.