Kaiser Aluminium downgraded by JPMorgan even as earnings beat expectations

JPMorgan Chase & Co has downgraded Kaiser Aluminum Corporation to Underweight from Neutral, citing valuation concerns despite strong recent performance.

The brokerage raised its price target to USD 142 from USD 124, even as the stock trades significantly higher at around USD 172.52. Shares have surged 175 per cent over the past year and 93 per cent in the last six months, prompting concerns that much of the upside is already priced in.

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Analyst Bill Peterson noted that the stock is trading above historical levels and beyond the firm’s valuation benchmark, indicating potential overvaluation. The company gained from strong demand in end-markets and wider margins. These came from key investments, including the new coating line and Phase 7 expansion. Still, risks remain. 

JPMorgan flagged high leverage, with a debt-to-equity ratio of 1.21, and warned of downside risks from tighter scrap spreads in 2027. The bank also noted uncertainty over when commercial aerospace will recover and how fast plate demand will grow. 

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Even with the downgrade, JPMorgan sees a positive short-term outlook if the company delivers on plans. Separately, KeyBanc stayed upbeat, lifting its price target to USD 183. This followed solid Q1 2026 results, earnings per share hit USD 3.74, and revenue reached USD 1.1 billion, beating forecasts.