Alcoa’s 2018 Outlook: Will the Stock Continue to Rise?



Alcoa’s 2018 outlook

Alcoa (AA) has had a nice run in 2017. Although the stock has come off its 2017 highs, it’s trading with strong year-to-date gains of 65.6% based on its closing prices on December 19. Notably, 2017 has been a remarkable year for aluminum (XME)—it has risen 22.8%. Aluminum producers including Century Aluminum (CENX), Norsk Hydro (NHY), and South 32 (S32) have also followed aluminum higher.

Series overview

We’re getting towards the end of 2017. In this series, we’ll look at some of the key factors that impacted Alcoa and other aluminum producers this year. We’ll also look at the different factors that could impact Alcoa in 2018. After Alcoa and Arconic were listed as separate companies in 2016, Alcoa became a pure-play aluminum producer. The company has backward integrated aluminum operations. Its footprint extends from bauxite mining to aluminum production.

Being a pure-play commodity producer, Alcoa’s outlook, like other metals and mining companies, is guided by underlying commodity prices. In Alcoa’s case, aluminum and alumina are the two key commodities that it sells. The company also makes some third-party bauxite sales.

Later this series, we’ll discuss the different factors that could impact Alcoa and other aluminum producers in 2018. First, we’ll analyze Alcoa’s 2017 price action.

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