Alcoa's Alumina Segment Gains Momentum: Can it Sustain?

Alcoa Corporation AA is witnessing solid momentum in its Alumina segment, supported by strong performances across its assets and favorable prices. The segment is benefiting from an increase in production at the Australian refineries and the growing popularity of its Sustana line of products. In third-quarter 2025, production from the Alumina segment increased 4% sequentially to 2,453 kilometric tons.

AA has announced several strategic actions over the past year to boost the segment’s organic growth and simplify its business portfolio. In August 2024, the company acquired Alumina Limited, which enhanced its position as one of the world’s largest bauxite and alumina producers. The buyout is likely to provide Alcoa with long-term value creation due to greater financial and operational flexibility.

Also, in March 2025, the company entered into a joint venture with IGNIS EQT to resume and improve the production capacity of its San Ciprian site. AA anticipates the restart of the site to be completed by mid-2026, which holds promise.

Driven by strength across its businesses, Alcoa provided a healthy outlook for the Alumina segment’s production and shipment volume. For 2025, AA expects alumina production to be in the range of 9.5-9.7 million tonnes, while shipments are projected to be 13.1-13.3 million tonnes.

Segment Snapshot of AA's Peers

Constellium SE CSTM is benefiting from strength in the Packaging & Automotive Rolled Products segment. The segment’s shipments increased 4% year over year to 820,000 metric tons in the first nine months of 2025, buoyed by a robust demand environment. Revenues from the segment increased 17% to $3.2 billion, supported by higher metal prices.

Ryerson Holding Corporation RYI is witnessing strong growth in the Aluminum segment. The segment’s shipments were relatively flat year over year at 143,000 tons in the first nine months of 2025. Revenues from the segment increased 7.7% to $868 million, supported by higher metal prices and strong shipments.

AA’s Price Performance, Valuation and Estimates

Shares of Alcoa have surged 73.9% in the past three months compared with the industry’s growth of 36.2%.

From a valuation standpoint, AA is trading at a forward price-to-earnings ratio of 14.07X, above the industry’s average of 13.69X. Alcoa carries a Value Score of B.

The Zacks Consensus Estimate for AA’s 2025 earnings has increased 3.5% over the past 60 days.

The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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