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Alcoa (AA) Gains But Lags Market: What You Should Know

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In the latest trading session, Alcoa (AA) closed at $38.84, marking a +0.31% move from the previous day. This move lagged the S&P 500's daily gain of 0.88%.

Prior to today's trading, shares of the bauxite, alumina and aluminum products company had lost 2.93% over the past month. This has lagged the Industrial Products sector's gain of 0.66% and the S&P 500's gain of 0.15% in that time.

Investors will be hoping for strength from AA as it approaches its next earnings release. On that day, AA is projected to report earnings of $1.30 per share, which would represent year-over-year growth of 6600%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.58 billion, up 20.1% from the year-ago period.

AA's full-year Zacks Consensus Estimates are calling for earnings of $4.65 per share and revenue of $10.58 billion. These results would represent year-over-year changes of +500.86% and +13.89%, respectively.

Investors should also note any recent changes to analyst estimates for AA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 10.63% higher within the past month. AA currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note AA's current valuation metrics, including its Forward P/E ratio of 8.33. Its industry sports an average Forward P/E of 15.58, so we one might conclude that AA is trading at a discount comparatively.

The Metal Products - Distribution industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 7, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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