Alcoa Corporation (AA) shares soared 9.4% in the last trading session to close at $90.66. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 32.1% gain over the past four weeks.
Alcoa’s rally is primarily driven by optimism regarding the robust demand environment for aluminum across the company’s end markets. Higher shipment volume for alumina on strong production and higher prices, and improvement in the demand for value-add products bode well.
This bauxite, alumina and aluminum products company is expected to post quarterly earnings of $2.47 per share in its upcoming report, which represents a year-over-year change of +212.7%. Revenues are expected to be $3.38 billion, up 17.8% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Alcoa, the consensus EPS estimate for the quarter has been revised 1.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on AA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Alcoa belongs to the Zacks Metal Products - Distribution industry. Another stock from the same industry, Constellium (CSTM), closed the last trading session 3.7% lower at $17.84. Over the past month, CSTM has returned 8%.
Constellium's consensus EPS estimate for the upcoming report has changed -45.3% over the past month to $0.18. Compared to the company's year-ago EPS, this represents a change of +20%. Constellium currently boasts a Zacks Rank of #5 (Strong Sell).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
