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Alcoa (AA) Stock Sinks As Market Gains: What You Should Know

·3 min read

Alcoa (AA) closed at $47.66 in the latest trading session, marking a -0.52% move from the prior day. This change lagged the S&P 500's 1.83% gain on the day. At the same time, the Dow added 1.4%, and the tech-heavy Nasdaq gained 0.09%.

Coming into today, shares of the bauxite, alumina and aluminum products company had lost 4.9% in the past month. In that same time, the Industrial Products sector lost 4.01%, while the S&P 500 lost 5.51%.

Wall Street will be looking for positivity from Alcoa as it approaches its next earnings report date. On that day, Alcoa is projected to report earnings of $0.64 per share, which would represent a year-over-year decline of 68.78%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.06 billion, down 1.71% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.26 per share and revenue of $13.03 billion. These totals would mark changes of +6.3% and +7.24%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Alcoa. These recent revisions tend to reflect the evolving nature of short-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. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Alcoa is currently a Zacks Rank #3 (Hold).

In terms of valuation, Alcoa is currently trading at a Forward P/E ratio of 6.6. For comparison, its industry has an average Forward P/E of 6.76, which means Alcoa is trading at a discount to the group.

Meanwhile, AA's PEG ratio is currently 0.68. 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 0.68 as of yesterday's close.

The Metal Products - Distribution industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% 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.

To follow AA in the coming trading sessions, be sure to utilize Zacks.com.


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