Record third quarter profit prices peak spreads as permanent. I see 2027 profit fading to $16.25 a share, worth $211.25 at 13 times.
Key points
- $5.26 a share in Q3 2026 on record 3.8 million tons of shipments shows peak pricing power now.
- 92% mill use in Q3 2026 beat the 80% industry rate, but contract prices lag spot by two months.
- $26 million aluminum loss in Q3 2026 at breakeven cash profit means growth still burns cash.
The call
Peak profit is priced as normal here. At $244.40 a share the stock trades at 18 times trailing profit. That price needs record Q3 steel spreads to hold through next year.
Quarterly revenue hits a record in Q3- Reported revenue
- My forecast
Source: SEC filings and Q3 release Oct 19 2026; Q4 FY26E is my estimate.
I expect spreads to fade instead. I see $16.25 a share in 2027 profit as steel prices cool and Q4 outages trim output. Aluminum stays a loss before turning positive, so growth cannot yet offset steel.
Valuation
| Driver | Figure |
|---|
| 2027 revenue | $24.0 billion |
| 2027 operating margin | 12.9% |
| 2027 profit | $16.25 a share |
| Multiple | 13 times profit |
| Target | $211.25 a share |
From $244 to $211 as peak spreads fadeSource: my estimates from Q3 release; shows rounded path to target.
A 13 multiple pays up from past peaks near 10 times for top operators plus aluminum growth. It sits well below 18 times trailing profit today. Downside of 14% with a thin yield favors a sell.
Risks
- Trade protection holds and coated spreads stay high, which weekly coil price reports through 2027 would show.
- Aluminum hits 90% hot mill use and auto shipments start, which monthly output and qualification updates through 2027 would show.
- Building demand lifts fabrication backlog further into 2027, which order data and Dodge reports through 2027 would confirm.
What would change my mind
Sustained coated spreads with rising aluminum shipments and yields through 2027 would prove peak profit is durable.