Kaiser Aluminum Slumps on Downgrade

Shares of Foothill Ranch-based Kaiser Aluminum Corp. close lower Friday after an analyst downgraded her rating on the stock citing weak demand from aerospace companies and an oversupply of aluminum plate products on the market. UBS analyst Timna Tanners cut her rating on Kaiser to “neutral” from “buy.” The company’s shares closed down nearly 8% on a market value of about $670 million. Kaiser shapes aluminum into custom pieces for the defense, aviation and auto industries. Tanners also cut her price target on Kaiser’s shares to $39 from $40. They closed at $33 on Friday. The analyst pointed to slower aircraft production and weak air travel “to merit a more cautious view toward (Kaiser’s) key end market.” She cited recent word from Los Angeles-based Reliance Steel & Aluminum Co., the top distributor of Kaiser’s products, about falling prices and excess supply for aluminum plates used in planes. For the past few months, Kaiser has been scaling production at plants across the country to be more in line with a drop in demand during the downturn. A British plant is set to close by September.