GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Alcoa looks cheap against its earnings, at 10x trailing and about 9x next year's versus the roughly 13x aluminum producers usually get. Applying 13x to next year's $5.80 EPS implies fair value of about $66-84, leaving shares about 25% below the low end. This read rests only on reported earnings and estimates, not fundamental work. x.comÂ
Alcoa is breaking out to a fresh 52-week high on heavy aluminum demand and a lack of supply. The breakout comes from a high rectangle, which per Bulkowski is the most reliable chart pattern for completing to target. The price target is 80. x.comÂ
David Einhorn's Greenlight expects Century Aluminum to beat consensus because sell-side estimates miss subsidy and tariff benefits and assume lower aluminum prices. Greenlight forecasts 2027 EPS of $14 versus $10.75 consensus and about $2.97 billion of cumulative free cash flow through 2028, roughly 90% of enterprise value. x.comÂ
Aluminum producers should benefit from higher prices after Iran's drone attack on a major aluminum plant in the United Arab Emirates. Alcoa is the biggest and most obvious buy, alongside Century Aluminum, Kaiser Aluminum and France's Constellium. x.comÂ
Alcoa stands to benefit from tighter aluminum supply after Aluminium Bahrain suspended 19% of its total production capacity, as reported by @DeItaone, a move that is also inflationary. x.comÂ
Copper, aluminum, Freeport-McMoRan and Rio Tinto can climb to their 2008 supercycle highs, 4-5x current levels, as AI data centers and aerospace infrastructure such as SpaceX drive a capex cycle rivaling the 2000s China buildout, a Hugh Hendry call from his George Gammon interview. Per Hendry, aluminum is mispriced: no one can earn a competitive return on a new North American smelter at spot, so prices must multiply to fund the capacity US supply-chain decoupling needs. Accumulate on breakouts. … Show more
