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

Alcoa (AA) closed at $42.56 in the latest trading session, marking a +1.92% move from the prior day. This change outpaced the S&P 500's 1.44% gain on the day. At the same time, the Dow added 1.26%, and the tech-heavy Nasdaq gained 5.21%.

Heading into today, shares of the bauxite, alumina and aluminum products company had lost 22.22% over the past month, lagging the Industrial Products sector's loss of 2.52% and the S&P 500's gain of 2.28% in that time.

Investors will be hoping for strength from Alcoa as it approaches its next earnings release, which is expected to be April 19, 2023. In that report, analysts expect Alcoa to post earnings of -$0.05 per share. This would mark a year-over-year decline of 101.63%. Meanwhile, our latest consensus estimate is calling for revenue of $2.7 billion, down 18.16% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.11 per share and revenue of $10.64 billion, which would represent changes of -56.31% and -14.52%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for Alcoa. These revisions help to show the ever-changing nature of 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 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 has moved 12.53% lower. Alcoa currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Alcoa is holding a Forward P/E ratio of 19.77. For comparison, its industry has an average Forward P/E of 11.72, which means Alcoa is trading at a premium to the group.

We can also see that AA currently has a PEG ratio of 6.63. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Metal Products - Distribution stocks are, on average, holding a PEG ratio of 5.71 based on yesterday's closing prices.

The Metal Products - Distribution industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 14, which puts it in the top 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Alcoa (AA) : Free Stock Analysis Report

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Zacks Investment Research