Alcoa's Alumina Segment Gains Momentum: Can it Sustain?

Core Insights - Alcoa Corporation (AA) is experiencing strong momentum in its Alumina segment, driven by increased production and favorable pricing [2][9] - The company has made strategic acquisitions and partnerships to enhance its growth and operational flexibility [3][4] - Alcoa has provided a positive outlook for alumina production and shipment volumes for 2025 [5][9] Group 1: Company Performance - The Alumina segment's production increased by 4% sequentially to 2,453 kilometric tons in Q3 2025 [2][9] - Alcoa's acquisition of Alumina Limited in August 2024 positions it as a leading bauxite and alumina producer, expected to create long-term value [3] - A joint venture with IGNIS EQT aims to improve production capacity at the San Ciprian site, with a restart anticipated by mid-2026 [4] Group 2: Market Outlook - For 2025, Alcoa expects alumina production to be between 9.5 million tonnes and 9.7 million tonnes, with shipments projected at 13.1 million tonnes to 13.3 million tonnes [5][9] - Alcoa's shares have surged by 73.9% over the past three months, outperforming the industry growth of 36.2% [8] Group 3: Valuation and Earnings Estimates - Alcoa is trading at a forward price-to-earnings ratio of 14.07X, slightly above the industry average of 13.69X [11] - The Zacks Consensus Estimate for Alcoa's 2025 earnings has increased by 3.5% over the past 60 days [13]