Europe’s Passenger Car Registrations Rose Modestly in May
May marks the 21st consecutive month where vehicle registrations have increased in the EU.
What Are the Long-Term and Short-Term Outlooks for Aluminum?
In the long term, aluminum demand looks strong globally as well as in China. Moreover, aluminum has been able to find new uses, especially in the automotive sector.
An investor’s guide to Constellium’s key financials
Currently, Constellium has close to $400 million in cash on its balance sheet. It’s expected some of this cash will be used to acquire Wise Metals.
Arconic’s 4Q16 Guidance: What Can Investors Expect?
The TCS (Transportation and Construction Solutions) segment’s 4Q16 ATOI is expected to rise 8%–10% YoY. The guidance is based on constant currency rates.
Have Physical Aluminum Premiums Bottomed Out?
Currently, US Midwest aluminum premiums are quoted at $0.06 per pound. Premiums have been almost flat in August.
Aluminum company metrics compared
Trading on the London metal exchange determines the price for primary aluminum. Any increase in the price of aluminum benefits companies that produce primary aluminum.
The Arconic Breakdown: Reading the Analysts
Arconic has a mean one-year price target of $29.25, representing a 4.9% upside over its closing price on March 21, 2017.
Must-know: Alcoa’s third quarter portfolio transformation
Alcoa announced the acquisition of Firth Rixson. Firth Rixson is the largest jet engine ring manufacturer. It gets ~75% of its revenues from aerospace industries.
Arconic’s 1Q17 Earnings: What You Need to Know
Arconic (ARNC) released its 1Q17 earnings on April 25. The company was listed as a separate entity on November 1, 2016, when Alcoa split into two new entities.
Must-know: Alcoa is placed better than other aluminum companies
The aluminum process starts by extracting bauxite from the Earth’s crust. The bauxite is refined into alumina. Alumina is a key raw material—along with carbon and electricity.
Alcoa’s 2016 Guidance Adds Gloom to 3Q Earnings Disappointment
During its 3Q16 earnings call, Alcoa lowered the business targets for all three segments under Arconic.
Constellium reports higher automotive structure shipments
Shipments for Constellium’s Automotive Structures and Industry increased by 11% over 3Q13. The EBITDA per ton, though, decreased by 4% over last year.
Alcoa’s transformation will impact its investors
As part of its transformation, Alcoa has been developing innovative products for its customers. It has been enhancing its product offerings through acquisitions.
Why aluminum companies’ stocks have surged
Alcoa and Century Aluminum delivered excellent returns. Century Aluminum led the way. It’s stock has more than tripled since the beginning of 2013. This surprised analysts.
Do Wall Street Analysts Find Value in Alcoa’s Split?
Wall Street analysts have mainly been sitting on the sidelines waiting for Alcoa to split. The markets seem to be playing a wait-and-watch game when it comes to Alcoa.
Alcoa Lowers Guidance for Aerospace Business for the Second Time
During its 3Q16 earnings call, Alcoa reduced its EPS segment’s fiscal 2016 revenue guidance to $5.6 billion–$5.8 billion from $5.9 billion–$6.1 billion.
Engineering Alcoa’s Success In 2015
Alcoa’s engineered products and services In the previous part of this series, we discovered that the engineered products and services segment is Alcoa’s (AA) most profitable. In this part, we’ll look at two factors that will drive this part of the business in 2015. Non-residential construction Alcoa earns almost $1 billion in revenues from the non-residential construction industry. Non-residential construction is picking up, […]
Why JANA Partners opened new position at Constellium
JANA Partners’ 13F filing disclosed a brand new position in aluminum product manufacturer Constellium N.V. (CSTM) that accounts for 1.83% of JANA’s 1Q 2014 portfolio.
How Can Century Aluminum Manage the Current Downtrend?
Fortunately for Century Aluminum, its leverage ratios are currently much lower than other companies in this space. CENX has $123 million in cash that should help it manage its operations over the next few quarters
Must-know: 3 expansions that will drive Alcoa’s automotive sales
The Saudi Arabia JV is expected to produce its own electricity. The Middle East has access to cheap fuel sources. As a result, the overall production cost is expected to be lower in this plant.
Why the Wise Metals acquisition is a smart move for Constellium
The U.S. markets have been resilient. Analysts expect the demand for both steel and aluminum in the U.S. to grow by more than the global average.
Must-know: Alcoa’s Aerospace Segment Is Important
The aerospace segment is the one of the biggest aluminum consumers in the world. Alcoa (AA) got $4 billion in revenue from aerospace companies last year.
How Alcoa Looked In 2014
In this series, we’ll pay special attention to Alcoa’s 2014 performance and to how investors can play Alcoa and other aluminum companies in 2015.
Will Rio Tinto’s Quality Aluminum Assets Be Enough?
The aluminum division contributed to 23% of Rio Tinto’s (RIO) 1H15 underlying EBITDA (or earnings before interest, tax, depreciation, and amortization).
What Aluminum Industry Indicators Are Key For Alcoa Investors?
It’s important that investors understand the key aluminum industry indicators. There are several ways to play the aluminum industry. You can invest in primary aluminum producers.
Facts that investors need to know about Alcoa
Alcoa is the largest aluminum company in the U.S. It’s among the top three aluminum producers worldwide. It has been the pioneer of the electrolytic process.
Can Arconic Get an Investment Grade Credit Rating after the Split?
Alcoa (AA) was targeting an investment grade credit rating (BND) for Arconic, but the company seems comfortable with a split rating.
Aerospace Is Arconic’s Aluminum, and Its Not Looking Good
Alcoa had a three-year target of $7.2 billion in revenues, but it has reduced this target to $6 billion–$6.2 billion ahead of the Arconic split.
Must-know: Playing the aluminum value chain
Bauxite is the most abundant metal in the earth’s crust. Because of the many impurities in bauxite, it must be refined to produce alumina.
Do Arconic’s Short-Term Challenges Outweigh Long-Term Drivers?
The expected synergy from Alcoa’s acquisition of Firth Rixson could be a key driver of Arconic’s (ARNC) medium-term performance.
Why Alcoa’s Global-Rolled Products segment is important
Alcoa’s GRP segment converts the primary aluminum into sheets. The sheets are used in the packaging, automotive, and aerospace industries.
A brief history of aluminum fabricator Constellium
Constellium is engaged in the aluminum fabrication business. Fabricators give custom shape and size to primary aluminum.
Investors should understand Constellium’s key operations
Constellium’s aerospace sector is expected to grow at a healthy pace over the next few years. Its packaging industry is one of the biggest aluminum consumers globally. Constellium provides automotive solutions to help reduce vehicle weight.
Alcoa’s Automotive Sales Could Be Hurt By Fall In Crude Oil Price
Crude oil prices impacted Alcoa’s automotive sales. Under its transformation strategy, Alcoa (AA) is working to address the automotive companies’ lightweighting needs.
Key Trends And Indicators In The Aluminum Industry
The year 2014 has been a remarkable year for the aluminum industry. Aluminum plays have delivered solid performances on Wall Street.
Why Alcoa Investors Should Watch Sales Of The Ford F-150 Truck
Truck drivers have an incentive to buy lightweight aluminum body trucks, which carry more cargo than steel body trucks and offer improved fuel economy.
Why the revenue drivers for Alcoa’s rolled products are important
Alcoa developed an aluminum foil that’s around a third of the thickness of human hair. It’s called aseptic foil. It’s used by the milk packaging industry in Brazil.
Must-know: 3 risks that aluminum company investors face
Litigations can be a big blow for aluminum producers. Litigations are expected to decrease aluminum prices and premiums. This will be negative for aluminum companies like Alcoa Inc. (AA), Century Aluminum (CENX), Kaiser Aluminum Corp. (KALU), and Constellium (CSTM).
Why Alcoa is positioned well to serve the automotive industry
Alcoa is working to expand its capacity in Tennessee. It’s a $275 million investment. Alcoa expects that the facility will be operational by mid-2015.
How Can Arconic Offer Long-Term Value to Investors?
The comps that Alcoa (AA) highlighted for its Value-Added business currently trade at an average of 9.3x their forward EV-to-EBITDA.
Why upstream profits increased with rising aluminum prices
Alumina producers price their products at a percentage of aluminum prices. Alumina prices depend on prevailing aluminum prices on the LME.
Must-know: Alcoa’s key financial metrics
Alcoa’s revenues have been on a downward trend for the past three years. In 2014, revenue is expected to be ~1% lower over the revenue in 2013. The aluminum market has been growing. The deceleration in revenues is due to falling aluminum prices. Aluminum prices fell to a four-year low this year, before rebounding slightly.
Must-know: An overview of the steel versus aluminum debate
Using aluminum to make vehicles has its own nuances. There have to be new production lines for the automobile companies. Aluminum can’t be welded easily like steel. This reduces the mass shift to aluminum. Aluminum also costs more than steel. It’s more than double steel’s price. However, a slow and steady shift is happening.
Why Constellium’s A&T profits fell in 3Q14
The slowdown in revenues was due to maintenance activities in the Ravenswood plant. Constellium is in the process of streamlining its maintenance process, which will help the company better manage maintenance-related issues.
Alcoa’s 4Q15 Revenues Slid on Lower Pricing, Divestitures
Alcoa reported revenues of $5.2 billion. While Alcoa’s earnings topped Wall Street expectations, its 4Q15 revenues came in lower than consensus estimates.
How the automotive segment helped Constellium’s P&ARP
Shipments in Constellium’s P&ARP segment increased by 4% over 3Q13. The growth in shipments is due to higher shipments of automotive sheets, which increased a whopping 82% over last year.
Industry Association Calls on Trump to Scrap Tariffs
The Section 232 tariffs imposed last year have received a mixed response from US companies.
Constellium Is Expanding Its Automotive Segment
Constellium completed the expansion of its automotive operations in Singen. It’s also working to expand its automobile capacity in France.
Must-know: An investor’s guide to Alcoa’s value-added business
Alcoa’s Engineered Products segment had revenues of ~5.7 billion in 2013. The power and propulsion business is the largest segment. It contributes ~$1.8 billion.
What Are The Major Regions That Consume Aluminum?
China is the biggest consumer. It consumes almost half of the aluminum that’s produced globally. However, this isn’t surprising. China is the biggest consumer of most industrial commodities.
Outlook 2015: Alcoa Set To Benefit
Aluminum premiums impact the profitability of aluminum plays depending on where each sits in the aluminum value chain. Alcoa is a primary producer.
Must-know: Key differences between steel and aluminum
Aluminum is lightweight—it weighs almost a third of steel. It’s malleable—it can easily be cast into different shapes. It’s corrosion resistant. It also conducts electricity well.
An investor’s guide to Constellium’s 3Q14 earnings
Rising aluminum premiums negatively impacted Constellium’s 3Q14 profits, unlike primary producers such as Rio Tinto (RIO) and Alcoa (AA).
Raising equity looks tough under Constellium’s current market scenario
Constellium intends to use a mix of debt and equity to fund the Wise Metals acquisition. However, raising equity looks tough with Constellium’s share price hitting a 52-week low.
Why investors should understand Alcoa’s business model
Alcoa is an integrated player in the aluminum value chain. This means its operations extend from bauxite refining to aluminum fabrication.
Why Alcoa is transforming from a pure-play aluminum company
Alcoa (AA) is the largest aluminum company in the US. It’s among the top three aluminum producers globally. The company was founded in 1888.
Will a shift in raw material strategy benefit Century Aluminum?
Alumina accounts for a large chunk of Century Aluminum’s raw material costs.
Why Century Aluminum is the most expensive aluminum play
Century Aluminum has the highest price-to-earnings ratio compared to its industry peers.
Strong 3Q earnings push Century Aluminum to 52-week high
Century Aluminum reported an adjusted earnings per share of $0.52 in the third quarter, a 135% increase over its 2Q EPS of $0.22.
Key facts about Century Aluminum’s Mt. Holly acquisition
If the current profitability of the Mt. Holly plant remains steady, Century’s acquisition of the plant can add another $44 million to its 2015 EBITDA.
Key aspects of Century’s Mt. Holly transaction
The Mt. Holly plant added $11 million in earnings before interest, taxes, depreciation, and amortization to Alcoa’s 3Q earnings.
Will Century Aluminum get over its supply chain issues?
The cost of electricity represents about one third of the cost of smelting. As a result, electricity prices are a key driving factor for aluminum companies.
Inventory Remeasurements Impact Alcoa’s Downstream Profit in 4Q14
Engineered products and services (or EPS) is Alcoa’s most profitable segment and produces value-added aluminum products.
Why JANA Partners sold stake in Huntsman
JANA Partners’ 13F filing said the fund sold its position in Huntsman (HUN) that accounted for 3.27% of JANA’s 4Q 2013 portfolio.
Why aluminum prices have beverage companies complaining
There were complaints from beverage companies like Coca-Cola (KO) and SABMiller because they weren’t able to meet the aluminum requirements for their bottling plants.
Must-know: 3 factors impacting the outlook for aluminum companies
Three factors are expected to impact aluminum companies going forward: aluminum capacities, financial demand, and auto companies.
Overview: An investor’s guide to the aluminum industry
Aluminum is the most abundant metal found in the earth’s crust. It’s soft, lightweight, and durable in nature. Its low density and resistance to corrosion make it a very important metal that a lot of industries use.
Must-know: Why China’s aluminum imports affect aluminum markets
With a mammoth 1.4 billion population and a growing economy, China currently dictates the global commodity market. Both iron and steel industries are reeling under the impact of China’s slowdown.
Must-know: Emerging trends in China’s aluminum market
Contrary to global expectations, China has increased its smelting capacities in the past decade. There are plenty of reasons behind this move.
Must-know: Understanding aluminum’s value chain
The aluminum industry has a value chain that consists of both upstream and downstream companies. Upstream companies are engaged in the mining and refining operations.
Why Credit Suisse Sees Attractive Opportunities in Constellium
On October 6, Credit Suisse (CS) shared a research report that named several of its top stock picks. The firm discussed Constellium, Mohawk Industries, Kraft Heinz, BlackRock, and JPMorgan Chase.
Could Cash Strengthen Arconic as It Battles Elliott Management?
According to Dow Jones, Elliott Management’s regulatory filings reveal that the company finds Arconic (ARNC) “dramatically undervalued.”
Arconic Just Sold Its Majority Stake in Alcoa
Arconic (ARNC) announced that it sold 60% of its stake in Alcoa (AA) and raised ~$890 million. In this series, we’ll explore what this stake sale means for investors.
What Are Analysts Projecting for Arconic’s 4Q16 Revenues?
Analysts expect Arconic to post revenues of $3.0 billion in 4Q16. Alcoa’s downstream business posted revenues of $3.37 billion in 3Q16.
Can Arconic Get Wall Street’s Support with Its 4Q16 Earnings?
Arconic will release its 4Q16 earnings on January 31. Its 4Q16 earnings could be an opportunity for Arconic to get some support from Wall Street.
Are Short-Term Challenges Playing on Arconic Investors’ Minds?
The Engineered Products and Solutions business of consolidated Alcoa would be the key driver of Arconic’s earnings, given its share in the company’s earnings.
Arconic’s 3Q16 Income Falls on Lower Pricing and Higher Costs
Arconic posted an ATOI (after-tax operating income) of $267 million in 3Q16. In comparison, its ATOI was $294 million in 2Q16 and $257 million in 3Q15.
Can Alcoa Make It Four in a Row with a 3Q16 Earnings Beat?
3Q16 earnings beat According to consensus estimates compiled by Bloomberg, analysts expect Alcoa (AA) to post adjusted EPS (earnings per share) of $0.11 in 3Q16. To put this in perspective, the company posted adjusted EPS of $0.15 in 2Q16 and $0.07 in 3Q15. Analysts expect Alcoa’s 3Q16 EPS to fall year-over-year and quarter-over-quarter. Earnings beat Notably, […]
Alcoa 3Q16 Preview: Could Productivity Offset Pricing Pressure?
Pricing pressure Previously, we looked at the different factors that could impact Alcoa’s (AA) 3Q16 upstream revenues. In this article, we’ll analyze how the company’s downstream revenues could play out in the quarter. Note that Alcoa’s downstream business consists of three segments: Engineered Products and Solutions (or EPS), Transportation and Construction Solutions (or TCS), and […]
How is Wall Street Rating Alcoa Before its 3Q16 Earnings Release?
Wall Street’s rating According to consensus estimates compiled by Bloomberg, Alcoa (AA) carries a one-year price target of $11.29, which represents an 11.3% upside over its September 30 closing price. Century Aluminum (CENX) is trading 9.7% below its consensus one-year price target. Rio Tinto (RIO) and Constellium (CSTM) are trading at price levels similar to […]
Is Alcoa Staring at an Automotive Slowdown in 2017?
Since the automotive sector is among the leading aluminum consumers, stagnation in car sales could impact primary aluminum producers.
Investor Alert: Can Arconic Navigate Its Short-Term Challenges?
Demand from the aerospace industry has grown at a steady rate for the last couple of years. Higher fuel prices have forced airline companies to order new energy-efficient aircraft.
In Focus: What Challenges Would Arconic Face in the Short Term?
Arconic’s post-split structure would include the business segments that are currently under the Global Rolled Products (or GRP), Transportation and Construction Solutions (or TCS), and Engineered Products and Solutions (or EPS) businesses.
Do the Markets Really Want Alcoa to Split into 2 Companies?
It’s been almost a year since Alcoa (AA) announced its split. In this series, we’ll explore the factors that are influencing Alcoa this year, including the various opportunities and challenges that the split could impose on the company.
Commodity Indicators Alcoa Investors Should Track This Month
Alcoa is gearing up for its split—scheduled for 2H16. After the split, the company will produce precision components and other value-added products.
How Do Arconic’s Comps Valuation Look before Alcoa’s Split?
In light of the PCP acquisition, some analysts believe that Arconic could be worth more than the combined entity. However, Alcoa has historically traded below PCP’s valuation multiples.
Rising Global Automotive Sales Should Support Aluminum Demand
China’s passenger car sales rose to 1.6 million in July, a year-over-year increase of 23%. This is the highest growth rate in 3.5 years.
Alcoa or Arconic: Who Did Best in 2Q16?
Under its transformation strategy, Alcoa has turned into a diversified engineering company. It reported 2Q16 EPS of $0.15 after adjusting for special items.
Alcoa’s Split: Key Takeaways from Form-10
After the split, Alcoa would be renamed “Arconic.” The upstream business would be split into a new company that would be called “Alcoa.”
What Does Alcoa Really Plan to Achieve with Its Split?
Both Alcoa and Arconic will have separate characteristics and investment propositions.
Can Strong Automotive Demand Support Aluminum Demand in 2016?
Rusal expects global aluminum demand to increase in 2016. It expects half of this incremental demand to come from the automotive sector.
How Did Century Aluminum Perform in 1Q16?
Century Aluminum (CENX) reported an adjusted net loss of $22 million in 1Q16, which translates into adjusted EPS (earnings per share) of -$0.23.
Three Key Differences Between Alcoa and Precision Castparts
There are several differences between Alcoa’s and Precision Castparts’ value-add businesses.
Which Aluminum Stocks Look Overbought?
Century Aluminum (CENX) looks to be the most overbought stock in our coverage of aluminum companies.
Two Factors that Could Put the Brakes on Rising US Aluminum Premiums
Despite rising aluminum premiums, most metal prices have hit fresh six-and-a-half year lows in January 2016 and continue to trade with a negative bias.
US Aluminum Premiums Could Remain Stable in 2016
While capacity cuts by US smelters might not have an impact on aluminum prices, cuts could support aluminum premiums. Aluminum premiums are more regional.
Alcoa Got Cold Feet near the Crucial $10 Level
For almost two months, Alcoa (AA) closed below the psychologically crucial level of $10. Alcoa’s stock rose almost 14% since November 12.
The Auto Industry’s Aluminum Usage Is Increasing
The usage of aluminum in automobiles has been gradually increasing, as it improves vehicle performance, reduces CO2 emissions, and boosts fuel economy.
No Surprises in Alcoa’s Post-Separation Management Structure
On November 24, Alcoa announced the executive management structure to be introduced following its split.
What’s Driving Alcoa’s Stock?
Alcoa’s stock has witnessed a decent upwards move over the last few trading sessions, gaining more than 16% since November 12.