Alcoa Surges 93.5% in 6 Months: Should You Buy the Stock Now?

Shares of Alcoa Corporation AA have been showing impressive gains of late, rising 93.5% in the past six months. The alumina, aluminum and bauxite products provider has outperformed the industry and S&P 500 composite’s growth of 81.8% and 13.1%, respectively. In comparison, the company’s peers, Constellium SE CSTM and Ryerson Holding Corporation RYI, have gained 40.1% and 14.7%, respectively, over the same time frame.AA Stock’s 6-Month Price PerformanceImage Source: Zacks Investment ResearchClosing at $61.09 on Thursday, the stock is trading below its 52-week high of $65.01 but significantly higher than its 52-week low of $21.53. The stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.AA Shares’ 50-Day and 200-Day SMAImage Source: Zacks Investment ResearchFactors Driving Alcoa’s PerformanceAluminum has witnessed significant growth in demand over the years, with growing popularity for lighter and energy-efficient electric vehicles, recycled aluminum and rechargeable batteries. The increase in global air travel has prompted aircraft manufacturers to ramp up production, spurring demand for aluminum alloys for fuselages and wings.With the increase in aluminum demand, the tariffs on metals gained traction. It’s worth noting that the U.S. administration in June 2025 increased tariffs on imported aluminum to 50% as a measure to correct trade imbalances and boost the domestic industry. The move has increased aluminum prices, thereby benefiting domestic producers like Alcoa.The company’s Aluminum segment is benefiting from strong demand in the electrical and packaging end markets in North America and Europe, and continued progress on the San Ciprián, Spain smelter restart. In third-quarter 2025, Alcoa’s production from the Aluminum segment increased 1% on a sequential basis to 579,000 metric tons.The segment’s third-party revenues were up 4%, supported by an increase in average realized third-party price. For 2025, AA expects the Aluminum segment to produce 2.3-2.5 million tonnes, while shipments are anticipated to be in the band of 2.5-2.6 million tonnes.Alcoa’s Alumina segment is benefiting from an increase in production at the Australian refineries and the growing popularity of its Sustana line of products. In third-quarter 2025, Alcoa’s production from the Alumina segment increased 4% on a sequential basis to 2,453 kilometric tons. For 2025, alumina production is anticipated to be in the range of 9.5-9.7 million tonnes, while shipments are likely to be 13.1-13.3 million tonnes.AA has announced several strategic actions over the past year to boost its organic growth and simplify its business portfolio. In August 2024, it acquired Alumina Limited, which enhanced its position as one of the world’s largest bauxite and alumina producers. The buyout is likely to provide Alcoa with long-term value creation due to greater financial and operational flexibility.Also, in March 2025, the company entered into a joint venture with IGNIS EQT to resume and improve the production capacity of its San Ciprian site. AA anticipates the restart of the site to be completed by mid-2026, which holds promise.Stock ValuationWith a forward 12-month price-to-earnings ratio of 13.28X, which is below the industry average of 13.53X, Alcoa stock presents an attractive valuation for investors. Although the stock is cheaper than its peer, Ryerson, it is overvalued compared to Constellium. Notably, Ryerson and Constellium are trading at 22.15X and 11.88X, respectively.Price-to-Earnings (Forward 12 Months)Image Source: Zacks Investment ResearchAlcoa’s Earnings Estimate RevisionEarnings estimates for AA have moved north over the past 60 days, reflecting analysts’ optimism. The company’s earnings estimates for 2025 have increased 3.5% to $3.55 per share over the past 60 days. Also, earnings estimates for 2026 have surged 51.6% to $4.61 per share over the same time frame.Image Source: Zacks Investment ResearchShould You Invest in AA Stock Now?Strong momentum across Alcoa’s Aluminum and Alumina segments, along with its leading position in the bauxite market, positions it favorably for impressive growth in the quarters ahead. The company’s strategic acquisitions and collaborations with stakeholders to expand its production capacities should also support its top-line performance.Also, its attractive valuation, positive analyst sentiment and robust growth prospects indicate it is the right time for potential investors to bet on this Zacks Rank #1 (Strong Buy) company. You can see the complete list of today’s Zacks #1 Rank stocks here.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alcoa (AA): Free Stock Analysis Report Constellium SE (CSTM): Free Stock Analysis Report Ryerson Holding Corporation (RYI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks