Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Alcoa Corp (AA.N)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Aluminum ton sold (kmt) 2,522 2,709 2,720 2,727

Aluminum Adj. EBITDA/t (US$) 419.5 1,264.1 1,018.6 660.7

Alumina tons sold (kmt) 13,300 11,591 12,188 12,375

Alumina benchmark price (US$/t) 362.05 313.66 325.00 350.00

Alumina Adj.EBITDA/t (US$) 66.3 (20.0) 2.0 23.3

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Underlying commodity prices (i.e. aluminum, RISKS TO UPSIDE FY Dec 2027e

alumina) Stronger-than-expected demand for aluminum

Energy and raw material prices, in particular and alumina; commodity prices overshoot MS Sales /

natural gas and caustic soda forecasts Revenue 13,414 20,198

Refining and smelting capacity rationalization in (US$, mm) 15,672

GLOBAL REVENUE EXPOSURE China

Operational setbacks in the bauxite/alumina

0-10% Latin America businesses are resolved EBITDA 2,539

APAC, ex Japan, Mainland 2,030 4,410 20-30% China and India RISKS TO DOWNSIDE (US$, mm) 3,187

20-30% Europe ex UK Bauxite and alumina operational setbacks

40-50% North America continue

1,224

Demand softens and metal prices undershoot Net incomeSource: Morgan Stanley Research Estimate 1,120 2,436

MS estimates (US$, mm)View explanation of regional hierarchies here Additional smelting capacity is restarted faster 1,641

than expected

MS ALPHA MODELS 4.60

EPS

9.17 OWNERSHIP POSITIONING (US$) 4.00 2/5 24 Month 1/5 3 Month 6.15

BEST Horizon MOST Horizon Inst. Owners, % Active 47%

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is HF Sector Long/Short Ratio 2x Mean Morgan Stanley Estimates

the highest favored Quintile and 5 is the least favored HF Sector Net Exposure 5.2% Source: Refinitiv, Morgan Stanley Research

Quintile

Refinitiv; MSPB Content.