Yahoo Finance Kaiser Aluminum Corporation (KALU) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Kaiser Aluminum (KALU)? Shares have been on the move with the stock up 12.5% over the past month. The stock hit a new 52-week high of $101.95 in the previous session. Kaiser Aluminum has gained 42.2% since the start of the year compared to the 10.6% move for the Zacks Industrial Products sector and the 20.9% return for the Zacks Metal Products - Procurement and Fabrication industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 24, 2024, Kaiser reported EPS of $1.02 versus consensus estimate of $0.58 while it beat the consensus revenue estimate by 3.14%.
For the current fiscal year, Kaiser is expected to post earnings of $4.12 per share on $3.1 billion in revenues. This represents a 50.36% change in EPS on a 0.56% change in revenues. For the next fiscal year, the company is expected to earn $7.53 per share on $3.4 billion in revenues. This represents a year-over-year change of 82.77% and 9.41%, respectively.
Valuation Metrics
Kaiser may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Kaiser has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 15.1X. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 9.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Kaiser currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Kaiser fits the bill. Thus, it seems as though Kaiser shares could have potential in the weeks and months to come.
How Does KALU Stack Up to the Competition?
Shares of KALU have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Northwest Pipe Company (NWPX). NWPX has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Northwest Pipe Company beat our consensus estimate by 52.94%, and for the current fiscal year, NWPX is expected to post earnings of $2.46 per share on revenue of $460.28 million.
Shares of Northwest Pipe Company have gained 12.5% over the past month, and currently trade at a forward P/E of 14.68X and a P/CF of 9.79X.
The Metal Products - Procurement and Fabrication industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for KALU and NWPX, even beyond their own solid fundamental situation.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Kaiser Aluminum Corporation (KALU) : Free Stock Analysis Report
Northwest Pipe Company (NWPX) : Free Stock Analysis Report
