Alcoa (AA) Falls More Steeply Than Broader Market: What Investors Need to Know

Alcoa (AA) closed the latest trading day at $26.32, indicating a -1.42% change from the previous session's end. The stock's change was less than the S&P 500's daily loss of 0.17%. Meanwhile, the Dow experienced a drop of 0.06%, and the technology-dominated Nasdaq saw a decrease of 0.55%.

Heading into today, shares of the bauxite, alumina and aluminum products company had lost 12.77% over the past month, lagging the Industrial Products sector's gain of 5.62% and the S&P 500's gain of 3.98% in that time.

Investors will be eagerly watching for the performance of Alcoa in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of -$0.25, marking an 8.7% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $2.54 billion, showing a 4.83% drop compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.26 per share and a revenue of $10.62 billion, representing changes of +111.45% and +0.62%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Alcoa. Recent revisions tend to reflect the latest 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. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 53.96% fall in the Zacks Consensus EPS estimate. Alcoa presently features a Zacks Rank of #3 (Hold).

Investors should also note Alcoa's current valuation metrics, including its Forward P/E ratio of 104.03. This expresses a premium compared to the average Forward P/E of 13.36 of its industry.

It is also worth noting that AA currently has a PEG ratio of 2.63. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Metal Products - Distribution industry had an average PEG ratio of 3.63 as trading concluded yesterday.

The Metal Products - Distribution industry is part of the Industrial Products sector. Currently, this industry holds a Zacks Industry Rank of 7, positioning it in the top 3% 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.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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