Alcoa Corporation: Q2’26 EBITDA soft on pricing peculiarity, updated Q3’26E modestly below consensus

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Alcoa Corporation: Q2’26 EBITDA soft on pricing peculiarity, updated Q3’26E modestly below consensus

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Alcoa Corporation

Q2’26 EBITDA soft on pricing peculiarity,

updated Q3’26E modestly below consensus

Reiterate Rating: UNDERPERFORM | PO: 51.00 USD | Price: 46.85 USD

South32 assets add scale but likely delay capital returns 17 July 2026

Alcoa (AA) reported a 2%-6% Q2’26 adjusted EBITDA miss vs. BofAe and consensus. For Equity

Q3’26, AA guided to a modest EBITDA tailwind. However, with lower spot pricing, we

estimate a 19% decline in Q3’26 EBITDA vs. Q2’26. On the recently announced

Key Changesacquisition of South32’s aluminum assets, AA reiterated the benefits from improved

scale with (longer-dated) synergies, EPS/FCF accretion, and a reasonable valuation on a (US$) Previous Current

through-cycle or replacement basis. However, we think the deal is expensive on spot 2026E Rev (m) 14,926.5 14,838.4

prices, and we see it delaying capital returns. We maintain our Underperform rating. 2027E Rev (m) 16,403.0 16,410.7

2026E EPS 6.76 6.99

Q2’26 adjusted EBITDA soft, while Q3’26 tailwinds seen

Q2’26 adjusted EBITDA of $901 million (m) was below BofAe at $959m and BBG/VA Lawson Winder, CFA >>

consensus at $919m/$951m, due to lower-than-expected Aluminum realized pricing, a Research Analyst Merrill Lynch (Canada)

function of the dramatic end of quarter decline in spot. For Q3’26, AA guided to a net +1 416 369 7592

$10m QoQ EBITDA improvement from a Pinjarra refinery recovery, lower energy/tariff lawson.winder@bofa.com

costs and higher production rates partly offset by lower energy sales and maintenance. SathishResearchKasinathanAnalyst

BofAS

+1 646 855 2769MTM Q3’26 EBITDA modestly below consensus sathish.kasinathan@bofa.com