UBS Upgrades Kaiser Aluminum to Buy, Sees Nearly 18% Upside Amid Market Dip

Kaiser Aluminum has experienced a recent pullback, presenting an opportune moment for investors to acquire shares, according to UBS. The investment bank upgraded the aluminum producer to a buy rating from neutral and increased its price target to $184 from $179, indicating approximately 18% upside from the previous close. “The selloff provides investors with an attractive entry into a business boasting improving earnings power,” said analyst Alex Stansbury in a note to clients on Monday. Shares of Kaiser Aluminum rose nearly 3% during Monday’s session but have fallen 13% over the past three months, primarily due to trade-related challenges and a leadership transition. The stock was trading about 20% below its 52-week high of $199.89 reached on August 12. Despite the downturn, UBS anticipates a rebound driven by positive trends in the aluminum industry and strengthening fundamentals. Stansbury emphasized ongoing benefits from investments at Warrick/Trentwood and the conclusion of aero destocking, with build rates accelerating. While scrap prices remain a tailwind, the company’s core strengths are expected to enhance share value. UBS’s outlook aligns with mixed Wall Street sentiment; among four analysts, two rate the stock as underperform, one as buy, and one as hold, according to LSEG data.

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