Is It Too Late To Reassess Alcoa (AA) After Its Strong Multi‑Year Share Price Run?

Simply Wall St.01-31 08:49

If you are wondering whether Alcoa's current share price still offers value after a strong run, this article will walk you through what the numbers are saying about the stock. The shares closed at US$...

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The shares closed at US$...</p>\n\n<a href=\"https://simplywall.st/stocks/us/materials/nyse-aa/alcoa/news/is-it-too-late-to-reassess-alcoa-aa-after-its-strong-multiye\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is It Too Late To Reassess Alcoa (AA) After Its Strong Multi‑Year Share Price Run?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs It Too Late To Reassess Alcoa (AA) After Its Strong Multi‑Year Share Price Run?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-01-31 08:49 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/materials/nyse-aa/alcoa/news/is-it-too-late-to-reassess-alcoa-aa-after-its-strong-multiye><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are wondering whether Alcoa's current share price still offers value after a strong run, this article will walk you through what the numbers are saying about the stock. The shares closed at US$...</p>\n\n<a href=\"https://simplywall.st/stocks/us/materials/nyse-aa/alcoa/news/is-it-too-late-to-reassess-alcoa-aa-after-its-strong-multiye\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AA","symbol_name":"美国铝业","start_time":0,"source_url":"https://simplywall.st/stocks/us/materials/nyse-aa/alcoa/news/is-it-too-late-to-reassess-alcoa-aa-after-its-strong-multiye","article_id":"2607307548","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/2051000-choice1-main-header/1585186695832"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/materials/nyse-aa/alcoa/news/is-it-too-late-to-reassess-alcoa-aa-after-its-strong-multiye","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2607307548","pubTimestamp":1769820563,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether Alcoa's current share price still offers value after a strong run, this article will walk you through what the numbers are saying about the stock.\nThe shares closed at US$56.81, with returns of 6.9% over the last 30 days, a 62.9% gain over the past year and 183.9% over five years, although the latest 7 day move was an 8.7% decline and year to date returns sit at 0.5%.\nRecent coverage of Alcoa has focused on how its share price reacts to shifts in sentiment around...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"AA":"美国铝业","BK4153":"铝","BK4588":"碎股","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK4585":"ETF&股票定投概念"},"translate_title":"在美国铝业(AA)股价多年强劲上涨之后，重新评估该公司是否为时已晚？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AA":1.5,"DCF":1},"content_text":"If you are wondering whether Alcoa's current share price still offers value after a strong run, this article will walk you through what the numbers are saying about the stock. The shares closed at US$56.81, with returns of 6.9% over the last 30 days, a 62.9% gain over the past year and 183.9% over five years, although the latest 7 day move was an 8.7% decline and year to date returns sit at 0.5%. Recent coverage of Alcoa has focused on how its share price reacts to shifts in sentiment around commodities and industrial demand, as investors reassess what they are willing to pay for future cash flows. This gives useful context for the mix of shorter term swings and longer term returns you are seeing in the stock chart. Right now Alcoa scores 3 out of 6 on our valuation checks, which you can see in more detail in our valuation scorecard. Next we will look at how different valuation approaches stack up for the company, before circling back to an even more practical way to think about value at the end of the article.  Find out why Alcoa's 62.9% return over the last year is lagging behind its peers. AdvertisementApproach 1: Alcoa Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s dollars to estimate what the entire business might be worth right now. For Alcoa, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s last twelve months Free Cash Flow is about $556.1 million. Analysts have specific Free Cash Flow estimates through 2027, with 2027 projected at $265.79 million, and Simply Wall St then extrapolates further out, with the 2035 Free Cash Flow projection at $397.33 million. All figures are in US$, aligned with the listing currency. When those projected cash flows are discounted back to today using this DCF approach, the estimated intrinsic value comes out at $21.14 per share, compared with the recent share price of $56.81. On this basis, the model suggests Alcoa is around 168.8% above its DCF estimate, which points to the shares screening as expensive on this measure right now. Result: OVERVALUED Our Discounted Cash Flow (DCF) analysis suggests Alcoa may be overvalued by 168.8%. Discover 868 undervalued stocks or create your own screener to find better value opportunities. AA Discounted Cash Flow as at Jan 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Alcoa. Approach 2: Alcoa Price vs Earnings For a profitable company like Alcoa, the P/E ratio is a useful yardstick because it links what you pay today with the earnings the business is already generating. Investors typically accept a higher P/E when they expect stronger growth or see lower risk, and a lower P/E when growth looks more modest or risks feel higher. Alcoa currently trades on a P/E of 12.86x. That sits below the Metals and Mining industry average P/E of 28.26x and also below the broader peer average of 31.63x. On the surface, that gap suggests the market is attaching a lower earnings multiple to Alcoa than to many of its peers. Simply Wall St’s Fair Ratio for Alcoa is 18.74x. This is a proprietary estimate of what a “reasonable” P/E might be for the company, based on factors such as its earnings growth profile, profit margins, risk characteristics, industry and market cap. Comparing the P/E to this Fair Ratio can be more useful than looking only at industry or peer averages, because it adjusts for Alcoa’s own fundamentals rather than assuming it should trade exactly like everyone else. With the actual P/E at 12.86x versus a Fair Ratio of 18.74x, Alcoa screens as undervalued on this measure. Result: UNDERVALUED NYSE:AA P/E Ratio as at Jan 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1416 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your Alcoa Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which let you attach a clear story to your numbers by linking your view on Alcoa’s future revenue, earnings and margins to a fair value estimate. A Narrative on Simply Wall St is your structured perspective on the company that connects three things: the business story you believe, the financial forecast that flows from that story, and the fair value that drops out of those assumptions. On the Community page, used by millions of investors, you can pick or build a Narrative for Alcoa, see the implied fair value, and then compare it to the current share price to help you decide whether the stock looks attractive, fairly priced or expensive relative to your own view. Narratives update automatically as new news or earnings figures are incorporated into the underlying estimates, so your story and valuation stay in sync with fresh information. For example, one Alcoa Narrative might assume very strong long term demand and a higher fair value, while another might assume more modest conditions and a lower fair value, giving you a clear range of perspectives to consider. Do you think there's more to the story for Alcoa? Head over to our Community to see what others are saying! NYSE:AA 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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