Alcoa Corporation AA
Alcoa's FY2025 results show a headline net income recovery to $1.157B (EPS $4.44) from just $60M in 2024, but operating income actually declined to $758M from $1.166B, meaning the earnings surge is driven by non-operational items rather than core improvement — operating margin compressed from 9.6% to 5.9% even as gross margin expanded to 16.9%. At $51.71 the stock trades at 10.5x PE, a 91% premium to the peer median of 5.5x, though the 7.3x EV/EBITDA sits 16% below the peer median, creating a mixed valuation picture.
Smart money has turned slightly negative (SM score -0.0353 as of 2026-06-30, down from +0.0782 in Q1 2026), and the stock remains below both its 50-day ($52.32) and 200-day ($56.74) moving averages despite a bullish MACD crossover, suggesting the recovery trade is largely priced in with limited near-term catalysts.
What could go wrong
- Operating margin deterioration. FY2025 operating margin fell to 5.9% from 9.6% in FY2024 despite revenue growth of 5.3%, indicating cost pressures or mix issues that could persist into 2026.
- Non-operational earnings quality. Net income surged to $1.157B while operating income declined to $758M, suggesting the EPS recovery to $4.44 is not sustainable through core operations.
- Smart money outflow. SM score turned negative at -0.0353 as of 2026-06-30, down from +0.0782 in Q1 2026, with fund count rising to 60 but sentiment deteriorating.
- Cyclical aluminum price exposure. As a pure-play aluminum producer, Alcoa's margins are highly sensitive to LME aluminum prices, which could compress the gross margin recovery to 16.9% if prices weaken.
What would change my mind
Where this comes from: FMP annual fundamentals, fiscal year 2025 · FMP annual fundamentals, fiscal year 2025 · derived_metrics, fiscal year 2025 · peer_relative composite. Orin's read on AA; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All AA filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Fmr | $886.2M | 0.0% of fund |
| Vanguard Portfolio Management | $677.6M | 0.0% of fund |
| Vanguard Capital Management | $621.8M | 0.0% of fund |
| Eagle Capital Management | $619.4M | 1.9% of fund |
| State Street | $567.1M | 0.0% of fund |
| Geode Capital Management | $304.1M | 0.0% of fund |
89 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 124 Form 4 filings, net −$9.2M. Of the 50 on hand, 0 were open-market purchases and 4 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about AA
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 8.7× | — | 29.8× |
| EV/EBITDA | 6.1× | — | — |
| P/S | 0.83× | — | — |
| P/B | 1.5× | — | — |
7.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.6B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$64
$53 – $75 · +48% against today's price
- 23 buy or overweight
- 18 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| AAAlcoa Corporation | $11B | 8.7× | 6.1× | 18.8% | 9.4% | 19% |
| EMNEastman Chemical Company | $8B | 17.1× | 9.5× | 19.9% | 5.0% | 7% |
| MOSThe Mosaic Company | $8B | 118.5× | 7.7× | 11.5% | 0.4% | 0% |
| MPMP Materials Corp. | $9B | — | 150.3× | -4.6% | -19.9% | -3% |
| WLKWestlake Corporation | $9B | — | — | 4.7% | -10.9% | -14% |
The median is of the 2 peers listed above and nothing else — check it against the column. This company trades 87.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.