Kaiser Aluminum Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

As you might know, Kaiser Aluminum Corporation (NASDAQ:KALU) just kicked off its latest first-quarter results with some very strong numbers. The company beat forecasts, with revenue of US$738m, some 6.0% above estimates, and statutory earnings per share (EPS) coming in at US$1.51, 126% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Kaiser Aluminum

Taking into account the latest results, the consensus forecast from Kaiser Aluminum's two analysts is for revenues of US$3.10b in 2024. This reflects an okay 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 5.1% to US$3.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.18b and earnings per share (EPS) of US$7.05 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The analysts made no major changes to their price target of US$72.75, suggesting the downgrades are not expected to have a long-term impact on Kaiser Aluminum's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kaiser Aluminum's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kaiser Aluminum's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kaiser Aluminum.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Kaiser Aluminum going out as far as 2025, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Kaiser Aluminum .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.