6 Feb

What’s Ahead for Alcoa after a Tough January?

WRITTEN BY Mark O'Hara FEATURED IN Company News, Insights, & Analysis


Alcoa (AA), the leading US-based integrated aluminum producer, has lost 8.9% so far in 2018 based on February 2 closing prices. Alcoa gained 91.2% last year, supported by aluminum prices. Aluminum prices gained 32.9% last year. While 2018 started off well for Alcoa and the broader aluminum space, Alcoa saw massive selling pressure after its 4Q17 earnings miss. Alcoa posted adjusted EPS (earnings per share) of $0.72 in 3Q17 and $0.14 in 4Q16. Alcoa’s 4Q17 earnings fell short of analysts’ top-line and bottom-line estimates. You can read about How Alcoa Fared in 4Q17 for a detailed analysis of Alcoa’s 4Q17 earnings and 2018 guidance.

What’s Ahead for Alcoa after a Tough January?


Last week we saw a sell-off in equity markets. Alcoa lost 9.0% in the week ending February 2. Century Aluminum (CENX) and Alumina Limited (AWC) also saw a negative price action of 13.6% and 1.7%, respectively, in the week. South32 (S32) closed flat during the week. The SPDR S&P Metals and Mining ETF (XME), which invests in US-based metal and mining companies, fell 5.3% last week. While market sentiment impacts mining companies’ price action in the short term, they tend to track the underlying commodity prices in the medium to long term.

Series overview

In this series, we’ll look at Alcoa’s outlook after a dismal January to help us understand what lies ahead for the stock in 2018. We’ll also look at Alcoa’s valuation to analyze how markets are valuing the stock given its risk-return tradeoff.

Let’s begin by looking at the recent trend in commodity prices.

Latest articles

23 Apr

Coca-Cola Stock Rises on Impressive Q1 Results

WRITTEN BY Sharon Bailey

Coca-Cola (KO) impressed investors with better-than-expected revenue and earnings for the first quarter.

23 Apr

Why Microsoft Bought Express Logic

WRITTEN BY Rachel Gunter

Microsoft (MSFT) announced this month that it had acquired a San Diego startup called Express Logic for an undisclosed amount.

Spirit Airlines is scheduled to report its first-quarter results on April 25. The airline has an impressive record of beating earnings estimates.

On April 23 before the market opened, legacy motorcycle maker Harley-Davidson (HOG) reported its first-quarter earnings results.

Williams Companies (WMB) is scheduled to release its first-quarter earnings on May 1 after the market closes.

McDonald’s (MCD) is set to report its first-quarter earnings before the market opens on April 30.