The company, which is engaged in lightweight metals, products and solutions for various industries including automotive, building and construction, has successfully transformed its image, analysts said.
"Within the past five years, Alcoa has transformed its image from an upstream heavy aluminum pure play to a diversified manufacturer/supplier of light metals mainly to the transportation and aerospace industries," analysts added.
"Looking ahead, we believe the upstream segments are poised for a sharp recovery while the downstream gains continue. As a result, we believe Alcoa is positioned to deliver meaningful earnings/EBITDA growth or nearly 90% over the next three years," analysts said.
Shares of Alcoa closed down 0.71% at 16.83 yesterday.
Separately, TheStreet Ratings team rates ALCOA INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALCOA INC (AA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AA's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 500.00% and other important driving factors, this stock has surged by 86.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 520.8% when compared to the same quarter one year prior, rising from $24.00 million to $149.00 million.
- Net operating cash flow has increased to $249.00 million or 16.35% when compared to the same quarter last year. In addition, ALCOA INC has also vastly surpassed the industry average cash flow growth rate of -55.48%.
- ALCOA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALCOA INC swung to a loss, reporting -$2.15 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus -$2.15).
- You can view the full analysis from the report here: AA Ratings Report