Alcoa's Aluminum Segment Growth Picks Up: More Upside to Come?

Alcoa Corporation’s AA Aluminum segment is benefiting from solid demand in the electrical and packaging markets in North America, and the restart of the San Ciprián (Spain), Alumar (Brazil), and Lista (Norway) smelters.

Demand for aluminum has grown significantly over the years, with rising popularity for lighter and energy-efficient electric vehicles, recycled aluminum and rechargeable batteries. The increase in global air travel has prompted aircraft manufacturers to ramp up production, spurring demand for aluminum alloys for fuselages and wings.

In 2025, Alcoa’s production from the Aluminum segment increased 5% on a year-over-year basis to 2,319 kilo metric tons. The segment’s third-party revenues in the year increased 15.6%, supported by an increase in average realized third-party price. It’s worth noting that the U.S. administration in June 2025 increased tariffs on imported aluminum to 50% as a measure to correct trade imbalances and boost the domestic industry. The move has increased aluminum prices, thereby benefiting domestic producers like Alcoa.

Amid this, Alcoa provided a healthy outlook for the segment’s production and shipment volume. For 2026, AA expects the Aluminum segment to produce 2.4-2.6 million tonnes, while shipments are anticipated to be in the band of 2.6-2.8 million tonnes.

Segment Snapshot of AA's Peers

Among its peers, Constellium SE CSTM is gaining 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 momentum 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 totaled $868 million, reflecting an increase of 7.7%, supported by higher metal prices and strong shipments.

AA’s Price Performance, Valuation and Estimates

Shares of Alcoa have gained 54.3% in the past three months, almost in line with the industry’s growth of 54.7%.

From a valuation standpoint, AA is trading at a forward price-to-earnings ratio of 12.45X, below the industry’s average of 13.03X. Alcoa carries a Value Score of A.

The Zacks Consensus Estimate for AA’s 2026 earnings has increased 38.5% 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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