What's Next After Rally For Alcoa Stock?

Core Insights - Alcoa reported Q3 2024 results with EBITDA of $455 million, a 6.5x increase year-over-year, and stock price increased by 75% over the last 12 months [1] - The company’s 2024 guidance includes alumina shipments projected between 12.9 million to 13.1 million metric tons, and aluminum segment shipments between 2.5 to 2.6 million tons [1] - Alcoa's stock has shown volatility with returns of 159% in 2021, -23% in 2022, and -24% in 2023, contrasting with the more stable Trefis High Quality Portfolio [1][2] Financial Performance - Net income rose from$ 30 million in the previous quarter to $135 million in Q3 2024, with EPS increasing from$ 0.16 to $0.57 [2] - Aluminum production increased for the eighth consecutive quarter, reaching 559,000 metric tons, a 3% sequential increase [2] - The acquisition of Alumina Ltd. on August 1 increased Alcoa's economic exposure to the alumina market, raising third-party sales from 2 million to approximately 6 million metric tons [2] Market Dynamics - Rising investments in renewable energy sectors, including electric vehicles and solar power, are driving aluminum demand [3] - Alcoa benefits from a strong balance sheet and lower energy costs due to its U.S.-based facilities compared to European competitors [3] - The company aims to enhance productivity and optimize assets, with a revised stock price estimate of$ 46 per share, approximately 10% above the current market price [3]