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Alcoa (AA) Stock Sinks As Market Gains: What You Should Know

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Alcoa (AA - Free Report) closed at $33.79 in the latest trading session, marking a -1.63% move from the prior day. This move lagged the S&P 500's daily gain of 0.88%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq lost 3.76%.

Heading into today, shares of the bauxite, alumina and aluminum products company had lost 3.1% over the past month, lagging the Industrial Products sector's gain of 1.4% and the S&P 500's loss of 0.38% in that time.

Wall Street will be looking for positivity from Alcoa as it approaches its next earnings report date. In that report, analysts expect Alcoa to post earnings of -$0.12 per share. This would mark a year-over-year decline of 104.49%. Our most recent consensus estimate is calling for quarterly revenue of $2.65 billion, down 27.18% from the year-ago period.

AA's full-year Zacks Consensus Estimates are calling for earnings of $0.79 per share and revenue of $10.87 billion. These results would represent year-over-year changes of -83.64% and -12.71%, respectively.

It is also important to note the recent changes to analyst estimates for Alcoa. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 29.46% lower within the past month. Alcoa is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that Alcoa has a Forward P/E ratio of 43.48 right now. This represents a premium compared to its industry's average Forward P/E of 11.47.

Also, we should mention that AA has a PEG ratio of 4.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AA's industry had an average PEG ratio of 5.05 as of yesterday's close.

The Metal Products - Distribution industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 120, which puts it in the top 48% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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