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

Alcoa (AA) closed at $35.23 in the latest trading session, marking a +1.53% move from the prior day. This change lagged the S&P 500's 1.97% gain on the day. Elsewhere, the Dow gained 1.88%, while the tech-heavy Nasdaq added 0.24%.

Heading into today, shares of the bauxite, alumina and aluminum products company had lost 31.68% over the past month, lagging the Industrial Products sector's loss of 12.08% and the S&P 500's loss of 9.93% in that time.

Alcoa will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.45, down 78.05% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.03 billion, down 2.51% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.16 per share and revenue of $12.86 billion. These totals would mark changes of +4.83% and +5.8%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Alcoa. 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.

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. Within the past 30 days, our consensus EPS projection has moved 1.41% lower. Alcoa is currently a Zacks Rank #4 (Sell).

In terms of valuation, Alcoa is currently trading at a Forward P/E ratio of 4.85. For comparison, its industry has an average Forward P/E of 5.63, which means Alcoa is trading at a discount to the group.

It is also worth noting that AA currently has a PEG ratio of 0.5. 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. AA's industry had an average PEG ratio of 0.5 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 4, which puts it in the top 2% 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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