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Kaiser Aluminum Corporation (NASDAQ:KALU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Kaiser Aluminum will make substantially more sales than they'd previously expected.
Following the upgrade, the latest consensus from Kaiser Aluminum's dual analysts is for revenues of US$1.8b in 2021, which would reflect a sizeable 52% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 170% to US$4.92. Previously, the analysts had been modelling revenues of US$1.3b and earnings per share (EPS) of US$4.76 in 2021. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Kaiser Aluminum's growth to accelerate, with the forecast 52% annualised growth to the end of 2021 ranking favourably alongside historical growth of 0.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kaiser Aluminum to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Kaiser Aluminum.
Analysts are definitely bullish on Kaiser Aluminum, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 4 other flags we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. 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.
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