Core Viewpoint - Alcoa Corporation has experienced a 35% increase in stock price over the past year, significantly outperforming the industry and S&P 500 growth rates of 11.9% and 23.2% respectively [1] Stock Performance - The stock closed at 37.01,tradingbelowits52−weekhighof47.77 and above its 52-week low of 24.86,indicatingpricestabilityasitisclosetoits50−dayand200−daymovingaverages[3]BusinessSegmentsPerformance−TheAluminumsegmentiscurrentlythestrongestdriverofAlcoa′sbusiness,withincreaseddemandinEuropeandNorthAmericacontributingtoitsgrowth[4]−ThecompanyanticipatesAluminumsegmentproductionof2.3−2.5milliontonnesandshipmentsof2.6−2.8milliontonnesfor2025[5]−TheAluminasegmentbenefitsfromhighershipmentsandincreasedsmelterproduction,withexpectedproductionof9.5−9.7milliontonnesandshipmentsof13.1−13.3milliontonnesfor2025[6]StrategicActions−Alcoahasundertakenstrategicactionstoenhanceorganicgrowth,includingtheacquisitionofAluminaLimitedinAugust2024,whichstrengthensitspositioninthebauxiteandaluminamarkets[7]−ThecompanyinitiatedthesaleofitsinvestmentintheMa′adenjointventuresvaluedatapproximately1.3 billion and made progress in improving production capacity at its San Ciprian site [8] Shareholder Returns - Alcoa's commitment to rewarding shareholders is evident, with dividends of 89millionpaidin2024,markinga23.64.43 per share, while estimates for 2026 have increased by 1.6% to $3.17 per share [10] Valuation Concerns - The stock's forward 12-month price-to-earnings (P/E) ratio is 8.69X, higher than the industry average of 8.14X, which raises concerns about potential pullbacks if market sentiment declines [11] Growth Prospects - Robust momentum in the Aluminum and Alumina segments, along with strategic acquisitions, positions Alcoa favorably for growth in the upcoming quarters [12] - Despite valuation concerns, positive analyst sentiment and growth prospects suggest it may be an opportune time for potential investors [13]
Alcoa(AA) ZACKS·2025-02-19 21:01