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Alcoa (AA) Hits 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of Alcoa (AA - Free Report) ? Shares have been on the move with the stock up 14.9% over the past month. The stock hit a new 52-week high of $52.45 in the previous session. Alcoa has gained 121.2% since the start of the year compared to the 10.5% move for the Zacks Industrial Products sector and the 45.6% return for the Zacks Metal Products - Distribution industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 15, 2021, Alcoa reported EPS of $1.49 versus consensus estimate of $1.35 while it beat the consensus revenue estimate by 8.41%.
For the current fiscal year, Alcoa is expected to post earnings of $5.82 per share on $11.73 billion in revenues. This represents a 601.72% change in EPS on a 26.27% change in revenues. For the next fiscal year, the company is expected to earn $5.8 per share on $11.86 billion in revenues. This represents a year-over-year change of -0.41% and 1.15%, respectively.
Valuation Metrics
Alcoa may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Alcoa has a Value Score of C. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 8.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 12X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Alcoa currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Alcoa meets the list of requirements. Thus, it seems as though Alcoa shares could have potential in the weeks and months to come.
How Does Alcoa Stack Up to the Competition?
Shares of Alcoa have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Alcoa (AA - Free Report) , MUELLER WATER PRODUCTS (MWA - Free Report) , and Worthington Industries (WOR - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 21% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Alcoa, even beyond its own solid fundamental situation.
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Alcoa (AA) Hits 52-Week High, Can the Run Continue?
Have you been paying attention to shares of Alcoa (AA - Free Report) ? Shares have been on the move with the stock up 14.9% over the past month. The stock hit a new 52-week high of $52.45 in the previous session. Alcoa has gained 121.2% since the start of the year compared to the 10.5% move for the Zacks Industrial Products sector and the 45.6% return for the Zacks Metal Products - Distribution industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 15, 2021, Alcoa reported EPS of $1.49 versus consensus estimate of $1.35 while it beat the consensus revenue estimate by 8.41%.
For the current fiscal year, Alcoa is expected to post earnings of $5.82 per share on $11.73 billion in revenues. This represents a 601.72% change in EPS on a 26.27% change in revenues. For the next fiscal year, the company is expected to earn $5.8 per share on $11.86 billion in revenues. This represents a year-over-year change of -0.41% and 1.15%, respectively.
Valuation Metrics
Alcoa may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Alcoa has a Value Score of C. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 8.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 12X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Alcoa currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Alcoa meets the list of requirements. Thus, it seems as though Alcoa shares could have potential in the weeks and months to come.
How Does Alcoa Stack Up to the Competition?
Shares of Alcoa have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Alcoa (AA - Free Report) , MUELLER WATER PRODUCTS (MWA - Free Report) , and Worthington Industries (WOR - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 21% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Alcoa, even beyond its own solid fundamental situation.