Alcoa (AA) closed the most recent trading day at $47.28, moving +1.46% from the previous trading session. This change outpaced the S&P 500's 0.75% gain on the day. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.01%.
Prior to today's trading, shares of the bauxite, alumina and aluminum products company had gained 14.55% over the past month. This has outpaced the Industrial Products sector's gain of 3.53% and the S&P 500's gain of 3.49% in that time.
Alcoa will be looking to display strength as it nears its next earnings release. In that report, analysts expect Alcoa to post earnings of -$0.57 per share. This would mark a year-over-year decline of 122.8%. Our most recent consensus estimate is calling for quarterly revenue of $2.65 billion, down 20.61% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.74 per share and revenue of $12.44 billion, which would represent changes of -30.6% and +2.37%, respectively, from the prior year.
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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 has moved 0.14% higher. Alcoa is currently a Zacks Rank #4 (Sell).
Investors should also note Alcoa's current valuation metrics, including its Forward P/E ratio of 9.82. This valuation marks a premium compared to its industry's average Forward P/E of 7.27.
Meanwhile, AA's PEG ratio is currently 0.8. 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 3.07 as of yesterday's close.
The Metal Products - Distribution industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% 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.
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