Kaiser Aluminum falls 25.3% after third-quarter results because earnings miss estimates

What happened

Kaiser Aluminum (KALU) fell 25.3% on October 22, 2026, after reporting third-quarter earnings per share of $1.89, below the Zacks Consensus Estimate of $2.08. Management said results reflected stronger conversion revenues and broad demand across aerospace, packaging and general engineering, but that a sharp reversal of favorable metal-market effects from the prior year cut into profit, according to Business Wire and Seeking Alpha. Trading was heavy: the stock opened 12.4% below the previous close and traded at 5.6 times its 20-day average volume.

How big was the move

The one-day decline of 25.3% was 5.1 times a typical daily move for this stock and was 24.6 percentage points worse than the Basic Materials sector median, which fell 0.7% on the day. Over the last five sessions the stock fell 22.5% while the S&P 500 fell 1.0%; the index itself fell 1.2% on the session. The stock’s beta of 1.74 indicates it tends to move more than the market. Because earnings were released that session, the results were the direct cause of the move.

The technical picture

The stock was trading well below short- and medium-term averages: 22.9% below its 20-day moving average, 25.9% below its 50-day moving average and 25.2% below its 200-day moving average. The 50-day average remained above the 200-day average, a sign of an established uptrend, but recent price action has erased much of that strength. The Relative Strength Index (14 days) was 23, below 30, a level often called oversold. The stock sat 42.5% below its 52-week high and had fallen 26.4% over one month and 29.5% over three months, though it has risen 44.2% over one year, 30.4 percentage points ahead of the S&P 500 over that period. Volatility was 78% annualized over 60 days, the highest reading of the past five years.

Fundamentals and valuation

For the four quarters through September 30, 2026, Kaiser reported revenue of $4.51 billion, which grew 40.4% from a year earlier and outpaced the prior quarter’s revenue growth of 32.8%. Diluted earnings per share for that period were $12.95, up 134.2% from a year earlier. Gross margin was 10.7% versus 10.5% a year earlier, and operating margin was 7.7% versus 4.7% a year earlier. Free-cash-flow margin was 1.1% and return on invested capital was 11.3%. On the balance sheet, the company had net debt of 2.0 times EBITDA and share count increased by 1.6% over one year.

Valuation metrics showed a price to trailing earnings of 8.9 times trailing earnings and price to forward earnings of 8.2 times expected earnings. The price to trailing earnings was the lowest reading of the past five years, with a five-year median of 20.6 times earnings. Free-cash-flow yield stood at 2.1%. PromtFinance scores ranked the company highly on Value at 94 (Exceptional) and Growth at 81 (Strong), while Quality was 28 (Very weak) and Stability was 20 (Very weak).

Earnings and analyst expectations

Kaiser’s last report on October 21, 2026, showed earnings per share of $1.89 against $2.37 expected, a shortfall of 20.3% below estimates; that result also missed the Zacks Consensus Estimate of $2.08. The company had 0 consecutive quarters beating estimates. Its average surprise over the last four reports was listed as 44.1% above estimates. Typical two-day reactions after recent reports had been to rise 1.2%. The next report was scheduled for February 17, 2027. Analysts covering the stock numbered 23, with a consensus rating of Hold and 39% of analysts rating the stock Buy or Strong Buy. The consensus price target was $176.25, 53.3% above the closing price.

What to watch

• October 21, 2026: third-quarter earnings per share of $1.89, 20.3% below estimates
• February 17, 2027: next scheduled earnings report
• PromtFinance Value score of 94 and Price to trailing earnings of 8.9 times trailing earnings
• Volatility 78% annualized over 60 days, the highest reading of the past five years
• Relative Strength Index (14 days) of 23, below the commonly cited oversold threshold of 30