Can Alcoa’s Investors Expect Better Days Ahead?



Alcoa’s 2017 outlook

2016 was an eventful year for Alcoa (AA), which is among the most followed stocks. The company, which traces its roots back to 1888, has been a pioneer in aluminum production technology. Aluminum production has been Alcoa’s primary business for years.

On November 1, 2016, Alcoa split into two entities: Alcoa and Arconic (ARNC). Let’s take a look at the timeline of Alcoa’s split.

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Split was a key driver

Alcoa now houses the Legacy Upstream business and competes with other primary producers Century Aluminum (CENX) and Norsk Hydro (NHYDY). The split completed the process the company had initiated in September 2015. While Alcoa has seen upward price action, Arconic has been falling since its listing.

Alcoa’s dismal 2016 performance was preceded by a terrible 2015. The stock ended 2015 with a fall of 35%. The mining sector (XME) had the worst year since the global financial crisis of 2008–2009, and mining companies fell to multiyear lows.

Series overview

Aluminum prices rose 13.4% in 2016. The market sentiment on aluminum has improved considerably since the beginning of 2016, when prices looked set to breach their 2009 lows.

In this series, we’ll see how Alcoa looks in the current market scenario. We’ll analyze Alcoa’s 2017 outlook and look at the different factors that could drive the company’s 2017 performance.

Let’s begin by analyzing Alcoa’s 2016 performance.


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