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Arconic (ARNC) Gains But Lags Market: What You Should Know

Zacks Equity Research

Arconic (ARNC) closed at $27.24 in the latest trading session, marking a +0.15% move from the prior day. This move lagged the S&P 500's daily gain of 0.26%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq added 0.4%.

Heading into today, shares of the maker of engineered products for the aerospace and other industries had gained 8.67% over the past month, outpacing the Basic Materials sector's gain of 6.77% and the S&P 500's gain of 3.92% in that time.

Investors will be hoping for strength from ARNC as it approaches its next earnings release. On that day, ARNC is projected to report earnings of $0.51 per share, which would represent year-over-year growth of 59.38%. Our most recent consensus estimate is calling for quarterly revenue of $3.62 billion, up 2.79% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.04 per share and revenue of $14.48 billion, which would represent changes of +50% and +3.32%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ARNC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ARNC currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, ARNC currently has a Forward P/E ratio of 13.33. Its industry sports an average Forward P/E of 14.98, so we one might conclude that ARNC is trading at a discount comparatively.

The Mining - Non Ferrous industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 23% 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 ARNC in the coming trading sessions, be sure to utilize Zacks.com.


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