Alcoa Mid-Year 2017 Outlook: Can the Stock Continue Its Good Run?



Alcoa mid-year 2017 outlook

Alcoa (AA) closed at $34.02 on July 3, gaining 4.2% from its previous day’s closing. The stock has gained 16.3% in the first half of 2017. Alcoa has outperformed broader markets (DIA)(DJIA-INDEX) in 1H17 amid resilience in aluminum prices. To be sure, aluminum has been among the better-performing industrial metals in 2017. The lightweight metal has gained 13.0% in 1H17. In comparison, copper and zinc have respectively risen 7.6% and 7.4% in the first half of 2017.

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Higher aluminum prices have supported aluminum producers’ 1H17 price action. Century Aluminum (CENX) has seen upward price action of 82% in the first half of 2017. The stock has been among the best-performing metal producers this year. Notably, we don’t have a lot of listed pure-play aluminum producers. Some of the top aluminum producers are Chinese companies. Also, although Rio Tinto (RIO) is among the leading aluminum producers, the company gets most of its revenues and profits from its iron ore operations.

Series overview

With the first half of 2017 behind us, investors might be wondering what lies ahead for Alcoa and aluminum prices in 2H17. In this series, we’ll look at the different factors that could drive Alcoa’s performance in the remainder of the year. This analysis could help us understand whether Alcoa can continue its good run in the coming months.

Before we analyze Alcoa’s outlook, in the next part, we’ll compare its performance with Arconic (ARNC).


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