Alcoa Swings to Profit in Q3, Announces $500M Share Repurchase Program

Aluminum producer Alcoa Corp. (AA) has reported excellent financial results for the third quarter of 2021. Headquartered in Pennsylvania, the company produces bauxite, alumina and aluminum products.

Alcoa reported adjusted earnings per share (EPS) of $2.05, compared to a loss of $1.17 in the previous year. EPS beat the Street’s estimate of $1.66.

Revenue totaled $3.1 billion, higher than $2.3 billion reported in the year-ago quarter and analysts’ expectations of $2.91 billion. The rise in revenue was driven by higher premiums for value-add products and increased aluminum and alumina prices.

The President and CEO of Alcoa, Roy Harvey, said, “Alcoa is stronger and better poised for the future, and we plan to continue our positive momentum and consistently deliver value through the commodity cycle.”

Meanwhile, the company has announced a $500 million share repurchase program, bringing its total share buyback authorization to $650 million. (See Insiders’ Hot Stocks on TipRanks)

Alcoa’s shares closed 14.7% up on Friday at $56. Moreover, the stock was trading 0.5% up, at the time of writing, in the pre-market session on Monday.

Last month, Argus Research analyst David Coleman upgraded the stock’s rating to Buy from Hold with a price target of $58 (3.6% upside potential).

The analyst said that the upgrade was backed by recent developments in China, increasing aluminum prices and Alcoa’s improving balance sheet.

Overall, the stock has a Strong Buy consensus rating based on 7 Buys and 2 Holds. The average Alcoa price target of $55.67 implies 0.6% downside potential. Shares have gained 343.4% over the past year.

According to TipRanks’ Smart Score rating system, Alcoa scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.

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