Alcoa Gains From Strength in Alumina Segment: More Upside to Come?

Alcoa Corporation AA is witnessing solid momentum in its Alumina segment, supported by strong performances across its assets and favorable prices. The segment is benefiting from strong production at the Australian refineries. In the fourth quarter of 2025, the Alumina segment’s production increased 1% sequentially to 2.48 million metric tons. The third-party shipments of alumina also rose 5% sequentially in the quarter.

AA remains focused on acquiring businesses to gain access to new customers, regions and product lines. In August 2024, the company’s acquisition of Alumina Limited strengthened its position as one of the world’s largest bauxite and alumina producers. The buyout will provide Alcoa with long-term value creation due to greater financial and operational flexibility.

Also, the company entered into a joint venture with IGNIS EQT in March 2025. This is expected to resume and enhance the production capacity of its San Ciprian site. However, the closure of the company’s Kwinana refinery has been affecting its production and shipment volumes.

However, Alcoa is expected to maintain strong demand momentum going forward, with growing popularity for lighter and energy-efficient electric vehicles, rechargeable batteries and aluminum alloys for aircraft fuselages and wings. AA expects alumina production in 2026 to be in the range of 9.7-9.9 million tons, while shipments are anticipated to be 11.8-12.0 million tons.

Segment Snapshot of AA's Peers

Constellium SE CSTM is benefiting from strength in the Automotive Structures & Industry segment. The segment’s shipments remained stable year over year at 202,000 metric tons in 2025, aided by a higher shipment of other extruded products. Revenues from the segment increased 10% to $1.6 billion.

Ryerson Holding Corporation RYZ is witnessing strong growth in the Aluminum segment. The segment’s shipments were relatively flat year over year at 185,000 tons in 2025. Revenues from the segment were up 10.4% to $1.15 billion, driven by higher metal prices and strong shipments.

AA’s Price Performance, Valuation and Estimates

Shares of Alcoa have gained 9.1% in the past three months compared with the industry’s growth of 8.3%.

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From a valuation standpoint, AA is trading at a forward price-to-earnings ratio of 10.01X, close to the industry’s average of 9.99X. Alcoa carries a Value Score of A.

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The Zacks Consensus Estimate for AA’s 2026 earnings has increased 16.4% over the past 60 days.

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The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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