Alcoa Corp: Pullback Overdone

研报英文原文证据摘录

Alcoa Corp: Pullback Overdone

delWare

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

We believe today's pullback in the stock seems overdone given impact on our 2026 e = Morgan Stanley Research estimates

estimates (~2%) due to new guidance ( Exhibit1 ). We remain Overweight as the

company is benefitting from a positive outlook for aluminum prices, which are

further supported by recent disruptions in the Middle East (region is ~9% of global

supply). Moreover, AA’s relatively high-cost smelters provide significant operating

leverage to aluminum prices, driving sizeable upward revisions to our earnings

estimates. AA shares are trading below their 5yr average EV/EBITDA and PE ratios

of 6.4x & 15.2x w/ HSD% FCF yield in 2026 & 2027. Solid cash flow generation will

lead to a rapid decline in AA’s expanded net debt—even without any site sales to

data centers—leaving room for potential increase to shareholder returns via higher

base dividends or buybacks.

We are reducing our estimates to reflect the latest company guidance and mark-to-

market our FX and commodity price assumptions for the quarter. We now forecast

2Q26 EBITDA of $947m (-3% vs. our previous forecast) and 2026 EBITDA of

$3.78bn (-2%). Our normalized diluted EPS estimates are $2.38 in 2Q26, and $8.65

in 2026. We are lowering our revenue estimates across all periods to reflect the

updated sensitivity assumptions for third-party revenue tied to LME linked contracts

(which does not impact EBITDA). We now forecast sales of $3.99bn in 2Q26 and Morgan Stanley does and seeks to do business with

$15.25bn in 2026 (each down 2% vs prior estimates). companies covered in Morgan Stanley Research. As a result,

investors should be aware that the firm may have a conflict of