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Arconic (ARNC) Hits 52-Week High: What's Driving the Stock?

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Shares of Arconic Inc. ARNC reached a 52-week high of $31.30 on Nov 26, before closing the session at $31.29.

The company has a market cap of roughly $13.5 billion. Average volume of shares traded in the past three months was around 3,242K. The company has expected earnings per share (EPS) growth rate of 55.2% for 2019.

The stock has surged 66.5% in the past year compared with the industry’s rally of 51.7%.

What’s Driving Arconic?

Better-than-expected third-quarter earnings performance, upbeat outlook and healthy growth prospects have been contributing to the gain in the company’s shares.

Arconic’s third-quarter adjusted earnings per share (EPS) improved 81.3% year over year to 58 cents, which beat the Zacks Consensus Estimate of 53 cents.

The company hiked earnings guidance for full-year 2019. It now sees adjusted EPS for 2019 in the range $2.07-$2.11, up from its earlier expectation of $1.95-$2.05. The revised guidance partly reflects the benefits of the company’s cost reduction actions.

Moreover, the company has raised the annualized cost reduction commitment to around $280 million on a run-rate basis, from its prior figure of $260 million. For 2019, the company expects savings of around $180 million, up from earlier commitment of $140 million.

Arconic is also benefiting from strong demand across automotive and aerospace markets. The company is seeing strength in aero engines and aero defense markets as evident from double-digit growth in the third quarter. Volume gain in the commercial transportation market is also contributing to organic revenue growth. Momentum across these major markets is likely to contribute to sales growth for 2019.  

Arconic Inc. Price and Consensus


Arconic Inc. Price and Consensus

Arconic Inc. price-consensus-chart | Arconic Inc. Quote

Zacks Rank & Other Key Picks

Arconic currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd (KL - Free Report) , Impala Platinum Holdings Ltd IMPUY and Polymetal International plc AUCOY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 103.8% in the past year.

Impala Platinum Holdings has projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 244.8% in a year.

Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have moved up 53.4% in the past year.

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