Many stocks have been testing new highs in 2020, and one of the most notable is Alcoa Corporation (AA). Currently, AA is trading at $12.98 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $9.88.
To add more color to this target, the company’s high over the last year is $24.63 and the low is $5.16. Over the last 52 weeks, AA is down -47.30% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, AA reported a profit of $356.0 million. Alcoa Corporation also saw revenues increase to $2.38 billion. In addition, AA has free cash flow of -$181.0 million as of 03-2020 The company’s EBITDA came in at $287.0 million which compares well with its peers.
AA booked profit margins of -8.40%, its Return on Equity (ROE) is -19.00%, and its Return on Assets is -5.80%. All told, it is clear that, AA needs to be on your watchlist.
About Alcoa Corporation
If readers are unfamiliar, Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells bauxite to customers who process it into industrial chemical products. The company is also involved in the aluminum smelting, casting, and rolling businesses; and the production of aluminum sheets primarily sold directly to customers in the packaging market for the production of aluminum cans. In addition, it owns hydro and coal generation assets that produce and sell electricity to the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. AA has a short ratio of 1.11 and outstanding shares of 186.00M.
AA has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 9.74 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -4.56. Alcoa Corporation AA also noted assets of $13.65 billion at the end of the last quarter. Investors should also keep an eye on sector updates as AA has historically followed its peers on positive news.
All told, Alcoa Corporation AA has strung together solid data and demonstrated underlying fundamentals. At its current valuation, AA represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Alcoa Corporation AA is now commanding a market cap of 2.41B and a float of 185.07M. AA is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of AA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in AA, either long or short, and we have not been compensated for this article.