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Alcoa (AA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
BancorpSouth (BXS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Alcoa (AA) closed at $36.39 in the latest trading session, marking a -1.19% move from the prior day. This change lagged the S&P 500's 0.25% loss on the day. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq lost 0.53%.

Prior to today's trading, shares of the bauxite, alumina and aluminum products company had gained 2.14% over the past month. This has outpaced the Industrial Products sector's loss of 6.76% and the S&P 500's loss of 2.35% in that time.

Investors will be hoping for strength from AA as it approaches its next earnings release, which is expected to be January 16, 2019. In that report, analysts expect AA to post earnings of $0.64 per share. This would mark a year-over-year decline of 38.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.51 billion, up 10.64% from the year-ago period.

AA's full-year Zacks Consensus Estimates are calling for earnings of $3.72 per share and revenue of $13.51 billion. These results would represent year-over-year changes of +23.59% and +15.91%, respectively.

Investors might also notice recent changes to analyst estimates for AA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.09% lower within the past month. AA is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note AA's current valuation metrics, including its Forward P/E ratio of 9.91. This represents a no noticeable deviation compared to its industry's average Forward P/E of 9.91.

Meanwhile, AA's PEG ratio is currently 1.11. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Metal Products - Distribution industry currently had an average PEG ratio of 1.11 as of yesterday's close.

The Metal Products - Distribution industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 37, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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