Credit Calls

Research evidence excerpt

Credit Calls

Tarek Hamid AC North America Credit Research

(1-212) 834-5468 23 July 2026 J P M O R G A N

tarek.x.hamid@jpmorgan.com

Earnings Review: KALU reported strong 2Q26 results, reflective of strong demand

across end markets, improved mix in Packaging and a favorable pricing environment.

Revenues increased 53% y/y and 14% sequentially to $1.26bn and adjusted EBITDA

increased over 2x y/y and 29% q/q to $166m. Shipments increased 6% y/y and adjusted

EBITDA benefited from a ~$27m favorable metal price lag. Demand in the company’s

packaging end market for coated products and strengthening aerospace production drove the

beat at KALU as destocking continued to ease in the latter. Conversion revenue increased

17% y/y due to strong pricing and improved product mix in Packaging. The company ended

the quarter with $628m in liquidity, including $59m in cash. Net leverage improved over a

half turn sequentially and is now almost a turn and a half lower from 3.4x at Dec 31.

Northrop Grumman: Remain Overweight Credit Following 2Q26 Results; NOC 30-

Year Fair Value Target T+70bp (Yilma Abebe)

Credit View: Northrop Grumman’s (NOC) 2Q26 earnings were in line with expectations.

NOC’s backlog grew to a record high of $105 billion, supported by strong demand for the

company’s products. Northrop is an important prime defense contractor for the U.S.

government and we think its key platforms are highly aligned with national security

priorities. Expectations for higher U.S. defense spending over the next several years as well

as growing international demand should benefit NOC’s revenue growth and cash

generation. We don’t think credit risk of NOC is meaningfully higher than General Dynamics

(GD), one of its best comps. Even accounting for the better ratings at GD, we think NOC