Core Insights - Alcoa reported revenue of $3.45 billion for the quarter ended December 2025, reflecting a 1.1% decrease year-over-year, but exceeding the Zacks Consensus Estimate by 6.34% [1] - The company's EPS was $1.26, up from $1.04 in the same quarter last year, representing a surprise of 32.63% over the consensus estimate of $0.95 [1] Financial Performance - Alcoa's average realized price per metric ton of alumina was $341.00, surpassing the analyst estimate of $334.30 [4] - The average realized price per metric ton of aluminum was $3,749.00, compared to the analyst estimate of $3,724.71 [4] - The average cost per metric ton of aluminum shipped was $2,478.00, lower than the estimated $2,679.38 [4] - Total sales for alumina were $1.44 billion, exceeding the estimate of $1.32 billion, but down 41.2% year-over-year [4] - Total sales for aluminum reached $2.37 billion, slightly below the estimate of $2.45 billion, with a year-over-year increase of 24.7% [4] - Third-party sales of bauxite were $173 million, exceeding the estimate of $160.89 million, with a year-over-year increase of 35.2% [4] - Total third-party sales amounted to $3.45 billion, compared to the average estimate of $3.34 billion, reflecting a 1.1% decrease year-over-year [4] Market Performance - Alcoa's shares have returned 19.1% over the past month, significantly outperforming the Zacks S&P 500 composite's 0.7% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - Revenue increased by 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue rising by 3% and the aluminum segment's third-party revenue increasing by 21% [9][10] - Net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [9][10] - Adjusted EBITDA was $546 million, reflecting a sequential increase of $276 million primarily due to higher metal prices [11][12] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [11] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [12] Market Data and Key Metrics Changes - FOB Western Australia alumina prices remained stable but slightly lower than the third quarter average, putting pressure on higher-cost refineries [21] - LME aluminum prices increased by 8% sequentially, reaching $3,200 per metric ton, supported by strong demand and constrained supply [23] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [30] - Alcoa is working on monetizing remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production guidance, citing strong operational performance and ongoing smelter restarts [33][34] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [42][43] Other Important Information - The company ended the year with a strong cash balance of $1.6 billion and free cash flow of $594 million for the year [13][15] - Capital expenditures for 2026 are estimated at $750 million, with a focus on sustaining capital and potential growth opportunities [17][18] Q&A Session Summary Question: Confidence in 2026 production guidance - Management believes the 2026 guidance is attainable based on ongoing smelter restarts and strong production performance [33][34] Question: Domestic supply of alumina and gallium project updates - Alcoa is open to considering U.S.-based alumina supply to reduce transportation costs and is making progress on the gallium project in Western Australia [36][37] Question: Alumina profitability and cost reduction initiatives - Management acknowledges the current cycle's challenges and emphasizes a commitment to cost management without jeopardizing future plant viability [42][43] Question: Update on idle sites and monetization - Negotiations for a primary site are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [45][46] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [51][53] Question: Capital return and net debt considerations - The company aims to maintain a strong balance sheet while balancing debt repayment and potential shareholder returns [70][72]

Financial Data and Key Metrics Changes - Revenue increased 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue up 3% and the aluminum segment's third-party revenue up 21% [9][10] - Fourth quarter net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [9][10] - Adjusted EBITDA was $546 million, with a sequential increase of $276 million primarily due to higher metal prices [11][12] - Return on equity for the year was 16.4%, the highest since 2022, and free cash flow for the year was $594 million [14][15] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [11][12] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [11][12] Market Data and Key Metrics Changes - FOB Western Australia alumina prices remained under pressure, with 60% of Chinese refineries facing margin pressures due to current pricing levels [21][22] - LME aluminum prices increased 8% sequentially, reaching $3,200 per metric ton, supported by strong demand and constrained supply [23][24] - The Midwest premium rose sharply, benefiting Alcoa's U.S. production, while the Rotterdam premium increased due to demand front-loading ahead of the CBAM implementation [27][28] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [30] - Alcoa is negotiating to monetize remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [7][8] - The company is not pursuing greenfield expansions due to high capital costs but is exploring brownfield opportunities for growth [87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production guidance, citing strong operational performance and ongoing restarts of smelters [33][34] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [42][43] - The outlook for 2026 includes expected alumina production between 9.7 and 9.9 million tons and aluminum production between 2.4 and 2.6 million tons [16][17] Other Important Information - The restart of the San Ciprián smelter is progressing well, with approximately 65% of capacity operational by the end of 2025 [6][8] - The company recorded a non-cash charge of $144 million to impair goodwill in the alumina segment due to current alumina prices not supporting the valuation [10] Q&A Session Summary Question: Confidence in 2026 production guidance - Management believes the 2026 guidance is attainable based on ongoing smelter restarts and strong production performance [33][34] Question: Domestic supply of alumina and gallium project updates - Management is open to using U.S.-based alumina supply if it reduces transportation costs and is making progress on the gallium project [36][37] Question: Alumina profitability and cost reduction initiatives - Management acknowledges the current cycle's challenges and emphasizes a low-cost position while exploring cost reduction initiatives [42][43] Question: Update on idle sites and monetization - Negotiations for a primary site are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [45][46] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [51][53] Question: Capital return and net debt considerations - Management aims to maintain a strong balance sheet while balancing debt repayment and potential shareholder returns [68][72]

4 th Quarter Earnings Alcoa Corporation This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "aims," "ambition," "anticipates," "believes," "could," "develop," "endeavors," "estimates," "expects," "forecasts," "goal," "intends," "may," "outlook," "potential," "plans," "projects," "reach," ...

Core Insights - Rio Tinto's stock has surged approximately 47% over the last six months, driven by favorable commodity markets, effective corporate strategy, and renewed investor interest in materials stocks [2] - The company is engaged in early-stage merger talks with Glencore, which could create the largest mining corporation globally with an enterprise value exceeding $200 billion [3] - The potential merger has heightened the perception of Rio Tinto's assets as increasingly rare and valuable [4] Commodity Market Performance - Rio Tinto's shares reached a 52-week peak price of over $85 in mid-January 2026, reflecting sustained positive investor sentiment [6] - Copper prices are near record highs, around $11,800 per tonne, driven by demand from electrification, renewable energy, and AI data centers [7] - Iron ore shipments from Pilbara increased quarter-on-quarter in 2025, contributing to cash flows despite a 13% decline in iron ore prices [8] Operational Performance and Strategic Changes - In its 2025 half-year results, Rio Tinto reported an underlying EBITDA of $11.5 billion and operating cash flow of $6.9 billion, demonstrating resilience amid fluctuating iron ore prices [10] - The company has revised its bauxite production outlook to 59–61 million tonnes for the full year, indicating an increase from earlier estimates [11] - Rio Tinto is refining its portfolio around iron ore, copper, aluminum, and lithium, while reducing non-core assets, including the acquisition of Arcadium Lithium [12][13] Market Sentiment and Sector Trends - The broader mining industry's positive performance has benefited Rio Tinto, as investors shift towards materials stocks amid economic uncertainty [14] - The demand for tangible assets is increasing due to inflationary pressures and industrial demand trends favoring firms producing physical commodities [14] Future Outlook - Rio Tinto's future will be influenced by commodity cycles and its ability to leverage high-growth metals like copper and lithium [17] - Upcoming earnings reports and guidance updates will be significant catalysts for the stock, with a focus on balancing expansion in high-growth segments while maintaining strong cash flows from iron ore [18] - The company's transformation is attracting investor attention, emphasizing the importance of strategic decisions and execution for its future journey [19]

Core Viewpoint - Analysts forecast Alcoa (AA) will report quarterly earnings of $0.95 per share, reflecting a year-over-year decline of 8.7%, with revenues expected to be $3.24 billion, down 7% from the previous year [1]. Earnings Estimates - Over the last 30 days, there has been a 7.3% upward revision in the consensus EPS estimate for the quarter, indicating analysts' reassessment of their initial forecasts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue and Sales Projections - Analysts estimate 'Total sales- Alumina' at $1.32 billion, indicating a year-over-year decline of 46% [5]. - 'Total sales- Aluminum' is projected to reach $2.45 billion, reflecting a 28.9% increase from the prior-year quarter [5]. - 'Third-party sales- Bauxite' are expected to be $160.89 million, showing a 25.7% increase from the previous year [5]. Price and Cost Metrics - The estimated 'Average realized third-party price per metric ton of alumina' is projected at $334.30, down from $636.00 in the same quarter last year [6]. - The 'Average realized third-party price per metric ton of aluminum' is expected to be $3724.71, compared to $3006.00 in the same quarter of the previous year [7]. - Analysts forecast the 'Average cost per metric ton of aluminum shipped' to be $2679.38, slightly up from $2675.00 in the same quarter last year [7]. Production Estimates - 'Third-party alumina shipments' are expected to reach 2239 thousand metric tons, down from 2289 thousand metric tons reported in the same quarter last year [8]. - 'Alumina production' is estimated at 2433 thousand metric tons, compared to 2390 thousand metric tons in the same quarter last year [9]. - 'Bauxite production' is projected at 10 million metric tons, up from 9 million metric tons reported in the same quarter last year [10]. Stock Performance - Alcoa shares have increased by 32.4% in the past month, significantly outperforming the Zacks S&P 500 composite's 2% increase, with a Zacks Rank 1 (Strong Buy) indicating expected outperformance in the near term [11].

Core Insights - Rio Tinto Group (RIO) shares have increased by 38.5% over the past six months, outperforming the industry and the S&P 500, which returned 19.3% and 14.1% respectively [1] Performance Overview - RIO's stock closed at $82.88, nearing its 52-week high of $85.46 and significantly above its 52-week low of $51.67, indicating strong upward momentum [4] - The stock is trading above both its 50-day and 200-day moving averages, reflecting confidence in the company's long-term prospects [4] Production and Operational Highlights - RIO's consolidated copper output rose by 10% year-over-year in Q3, aligning with the high end of its 2025 guidance [7][9] - The company achieved its first copper production at Johnson Camp using Nuton technology, targeting 30,000 tons over four years [10][11] - Iron ore shipments increased by 6% quarter-over-quarter, with improvements in aluminum and alumina output due to enhanced operations [13] Growth Projects - RIO's Rhodes Ridge joint venture approved a $191 million feasibility study for developing a major undeveloped iron ore deposit in Western Australia, aiming for initial production of 40-50 million tons annually [14] - The Simandou iron ore project in Guinea has commenced commissioning, marking a significant milestone in the company's growth pipeline [14] Challenges and Market Position - The company faced challenges such as weather-related disruptions, planned maintenance activities, and cost pressures from inflation, which impacted margins [15] - RIO operates in a competitive market with peers like NioCorp Developments and TMC, which have shown lower performance compared to RIO [15] Financial Outlook - The Zacks Consensus Estimate for RIO's bottom line for 2026 has increased by 10.1% in the past 60 days, indicating positive revisions [18] - RIO is trading at a forward price-to-earnings ratio of 11.71X, significantly lower than the industry's average of 16.87X, suggesting potential undervaluation [20] Conclusion - Despite facing some challenges, RIO's growth projects and rising copper production position the company favorably for long-term growth, making it an attractive opportunity for investors [21]

Investment Opportunities in Venezuela's Oil Industry - President Trump's initiative aims to attract billions of dollars from US energy companies to revitalize Venezuela's oil sector, which is believed to have the world's largest oil reserves [1][4] - The plan includes US companies potentially rebuilding Venezuela's oil infrastructure and reviving production, with an initial offer of up to 50 million barrels of oil valued at approximately $3 billion [5][6] Challenges and Risks - Significant questions remain regarding the timeline and costs associated with increasing energy production, with concerns that the political will in both the US and Venezuela may wane over time [2] - The current global oil market is characterized by oversupply, with declining capital spending in oil due to abundant supply and lower-than-expected demand [3] - Experts estimate that restoring Venezuela's oil production could require investments of up to $100 billion over the next decade, raising doubts about the feasibility of such a turnaround [9] Major Players and Market Dynamics - Chevron is currently the only major US oil producer operating in Venezuela, with the potential to increase its cash flow by up to $700 million annually if production levels are restored [7] - Previous operators like Exxon Mobil and ConocoPhillips face challenges in recovering assets worth over $9 billion due to past seizures, complicating their return to the market [8] Refining and Related Opportunities - US refiners are already seeing increased interest, with about 140 million barrels of Venezuelan crude processed in 2025, representing 0.8% of total US throughput [11] - Companies like Valero Energy and PBF Energy could benefit from increased Venezuelan crude flows, while Phillips 66 may see upside from the need for imported diluent [12] Broader Investment Themes - The potential for increased tanker operations could benefit companies like DHT Holdings and Frontline, especially if Chevron charters compliant vessels to replace those circumventing US sanctions [13] - Beyond oil, Venezuela's rich mineral deposits present opportunities for mining companies, although the current state of the industry poses significant challenges [16][17] Infrastructure and Long-Term Investments - Rebuilding Venezuela's infrastructure is viewed as a long-term opportunity, with historical precedents suggesting that recovery in post-crisis markets can take years [18] - Investors are advised to consider high-quality regional companies with indirect exposure to Venezuela, treating direct investments as long-dated options [19] Defense and Food Sector Implications - Increased geopolitical uncertainty may benefit defense companies, with potential gains for firms like Lockheed Martin and Northrop Grumman [20] - Opportunities in food exports may arise if Venezuela's economy recovers, with companies like Bunge Global and Archer-Daniels-Midland positioned to benefit [21] Debt and Macro Considerations - The removal of Maduro has sparked interest in Venezuela's defaulted debt, with potential for higher recovery values as part of a debt restructuring [22][23] - The geopolitical shakeup could influence macro-oriented investments, with implications for oil prices and consumer confidence [24][25]

Core Insights - Alcoa Corporation (AA) shares have increased by 93.5% over the past six months, outperforming the industry and S&P 500 growth rates of 81.8% and 13.1%, respectively [1] - The stock closed at $61.09, below its 52-week high of $65.01 but significantly above its low of $21.53, indicating strong upward momentum and market confidence [3] - Alcoa's performance is driven by strong demand for aluminum and alumina, higher aluminum prices, and tariffs that benefit domestic producers [7][9] Stock Performance - Alcoa's stock has shown solid performance, trading above both its 50-day and 200-day moving averages, reflecting positive market sentiment [3] - The company has outperformed peers such as Constellium SE (CSTM) and Ryerson Holding Corporation (RYI), which gained 40.1% and 14.7%, respectively, in the same period [1] Demand Drivers - The demand for aluminum has surged due to the rise in electric vehicles, recycled aluminum, and increased air travel, prompting aircraft manufacturers to increase production [8] - The U.S. administration's decision to raise tariffs on imported aluminum to 50% has further boosted domestic aluminum prices, benefiting Alcoa [9] Segment Performance - Alcoa's Aluminum segment reported a 1% increase in production to 579,000 metric tons in Q3 2025, with expectations of producing 2.3-2.5 million tonnes for the year [10][11] - The Alumina segment also saw a 4% production increase to 2,453 kilometric tons in Q3 2025, with anticipated production of 9.5-9.7 million tonnes for the year [12] Strategic Actions - Alcoa has made strategic acquisitions, including the purchase of Alumina Limited, enhancing its position in the bauxite and alumina market [13] - A joint venture with IGNIS EQT aims to improve production capacity at the San Ciprian site, with a restart expected by mid-2026 [14] Valuation and Earnings Estimates - Alcoa's forward 12-month price-to-earnings ratio stands at 13.28X, below the industry average of 13.53X, indicating an attractive valuation for investors [15] - Earnings estimates for 2025 have increased by 3.5% to $3.55 per share, while 2026 estimates surged by 51.6% to $4.61 per share [18] Investment Outlook - The strong momentum in Alcoa's segments, strategic growth initiatives, and favorable market conditions position the company for impressive growth [20] - Positive analyst sentiment and attractive valuation suggest it may be a good time for potential investors to consider Alcoa stock [20]

Core Insights - U.S. equities finished 2025 positively, with the S&P 500 increasing approximately 16%, but the outlook is complicated due to geopolitical risks and policy uncertainties [2][3] Economic Environment - Geopolitical risks have resurfaced, particularly following President Trump's announcement of temporary U.S. control over Venezuela, raising concerns about stability in a significant oil-producing country [2] - Investors are preparing for policy uncertainties, including a Supreme Court ruling on tariffs and the appointment of a new Federal Reserve chair, which may lead to increased market volatility [3] Investment Strategy - In a climate of policy uncertainty and geopolitical risks, value investing is recommended for stability, focusing on companies with strong fundamentals, reasonable valuations, and durable cash flows [4] - Earnings yield is highlighted as a valuable metric for identifying undervalued stocks, calculated as annual earnings per share divided by market price, providing insight into the anticipated return on investment [6][7] Stock Screening Criteria - A screening criterion of an earnings yield greater than 10% is established, alongside estimated EPS growth for the next 12 months being greater than or equal to the S&P 500, and an average daily trading volume of at least 100,000 [9][10] - Stocks must also have a current price of $5 or more to qualify for consideration [12] Selected Stocks - Allied Gold Corporation (AAUC): Expected 2026 sales growth of 45% and earnings growth of 323%, with EPS estimates rising by $0.85 [13] - Alcoa Corp. (AA): Anticipated 2026 sales growth of 7% and earnings growth of 29%, with EPS estimates increasing by $1.03 [14] - Star Bulk Carriers (SBLK): Projected 2026 sales growth of 19% and earnings growth of 224%, with EPS estimates up by $0.61 [15] - PHINIA Inc. (PHIN): Expected 2026 sales growth of 2% and earnings growth of 15%, with EPS estimates rising by $0.52 [16]