Kaiser Aluminum (KALU) shares fell about 19% from August highs providing investors an attractive entry point into a business with improving earnings power, UBS Securities said in a note Monday.

The selloff, which analysts described as overdone, is due to concerns over renegotiations of the US-Mexico-Canada Agreement, Fred Stephan's appointment as chief executive, and scrap spread sustainability, according to the note.

Underlying fundamentals are strengthening, with price, volume and product mix driving roughly $41 million of Q2 EBITDA growth, the brokerage said.

Scrap remains a significant tailwind, with the company's Q2 results suggesting that scrap-related tailwinds are a bigger earnings driver than appreciated by the market, analysts said.

The brokerage said it sees continued benefits from investments at Warrick and Trentwood, alongside the end of aero destocking as build rates accelerate.

UBS Securities upgraded Kaiser Aluminum to buy from neutral, and raised its price target to $184 from $179.

Price: 157.51, Change: +1.13, Percent Change: +0.72