6 Mar

Have Markets Been Harsh on Alcoa This Year?

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

Alcoa falls

Leading US-based aluminum producer Alcoa (AA) is having a tepid 2018. The stock has fallen 16.3% so far in the year based on its March 2, 2018, closing price.

Looking at other aluminum producers, Century Aluminum (CENX) has risen 4.2%, while South32 (S32) has fallen 5.4%. Alumina Limited (AWC) has fallen 7.8% YTD (year-to-date).

Have Markets Been Harsh on Alcoa This Year?

The year 2018 marks a reversal in fortune for Alcoa. The stock had been in an uptrend since it was listed as a separate company in November 2016. It rose 91.2% last year supported by higher aluminum and alumina prices (XME). Aluminum prices rose 32.9% last year, building on their 2016 gains.

Base metals

Base metals seem to have lost steam. Copper and aluminum are trading at YTD losses based on their March 2 closing prices. Prior to this, base metals had a strong 2017. Speaking of Alcoa, its 4Q17 earnings fell short of analysts’ top and bottom line estimates. Read How Alcoa Fared in 4Q17 for a detailed analysis of Alcoa’s 4Q17 earnings and 2018 guidance. We also saw a broader sell-off in equity markets at the end of January 2018, which had a contagious impact on base metal prices.

Series overview

In this series, we’ll see what factors are weighing on Alcoa this year. We’ll also examine whether markets could be getting a little bearish on Alcoa. Finally, we’ll see how analysts are rating Alcoa and other aluminum producers this year.

Let’s begin by analyzing how aluminum prices have moved so far in 2018.

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