Alcoa (AA) Shares Up 5.9% on Better-Than-Expected Earnings

Alcoa Corp (NYSE:AA) shares shot up 5.9% on Thursday following a better than expected earnings announcement. The company traded as high as $40.68 and last traded at $38.85. 13,824,745 shares changed hands during trading, an increase of 234% from the average session volume of 4,133,996 shares. The stock had previously closed at $36.70.

The industrial products company reported $0.63 earnings per share for the quarter, topping analysts’ consensus estimates of $0.36 by $0.27. The business had revenue of $3.39 billion for the quarter, compared to analyst estimates of $3.35 billion. Alcoa had a positive return on equity of 10.43% and a negative net margin of 0.09%. The business’s revenue was up 14.4% compared to the same quarter last year. During the same quarter last year, the firm posted $0.72 earnings per share.

Alcoa declared that its Board of Directors has approved a stock repurchase plan on Wednesday, October 17th that permits the company to buyback $200.00 million in outstanding shares. This buyback authorization permits the industrial products company to reacquire up to 2.9% of its stock through open market purchases. Stock buyback plans are typically an indication that the company’s management believes its stock is undervalued.

Several brokerages have recently commented on AA. Zacks Investment Research lowered Alcoa from a “strong-buy” rating to a “hold” rating in a research note on Monday, June 25th. Deutsche Bank cut their price target on Alcoa from $70.00 to $55.00 and set a “buy” rating on the stock in a research note on Tuesday, July 24th. ValuEngine lowered Alcoa from a “buy” rating to a “hold” rating in a research note on Saturday, July 14th. Morgan Stanley cut their price target on Alcoa from $60.00 to $57.00 and set a “buy” rating on the stock in a research note on Monday, July 23rd. Finally, Credit Suisse Group cut their price target on Alcoa from $69.00 to $65.00 and set an “outperform” rating on the stock in a research note on Thursday, July 19th. One equities research analyst has rated the stock with a sell rating, four have given a hold rating and eleven have given a buy rating to the stock. Alcoa presently has a consensus rating of “Buy” and a consensus price target of $61.67.

Hedge funds have recently modified their holdings of the stock. Acadian Asset Management LLC bought a new stake in Alcoa during the second quarter valued at about $105,000. Quad Cities Investment Group LLC bought a new stake in Alcoa during the second quarter valued at about $112,000. Berson & Corrado Investment Advisors LLC bought a new stake in Alcoa during the second quarter valued at about $202,000. Lodestar Investment Counsel LLC IL bought a new stake in Alcoa during the second quarter valued at about $205,000. Finally, Hartford Investment Management Co. bought a new stake in Alcoa during the second quarter valued at about $206,000.

The stock has a market cap of $6.84 billion, a price-to-earnings ratio of 12.82, a PEG ratio of 2.84 and a beta of -0.10. The company has a quick ratio of 0.87, a current ratio of 1.42 and a debt-to-equity ratio of 0.27.

About Alcoa (NYSE:AA)

Alcoa Corporation produces and sells bauxite, alumina, and aluminum products. The company offers aluminum sheets for the production of cans for beverage and food. It also engages in the aluminum smelting, casting, and rolling businesses; and generation and sale of renewable energy, as well as provision of ancillary services.

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