Why Alcoa Stock Deserves a Second Look: Sushmita Roy's Analysis of Recent Earnings and Growth Catalyst

According to analyst Sushmita Roy, Alcoa Corporation’s recent earnings performance reveals compelling reasons for investors to reconsider the aluminum giant’s investment potential. The company recently revealed its fourth-quarter 2025 results, with earnings coming in at 95 cents per share on revenues of $3.24 billion—a testament to its operational resilience.

Alcoa’s Consistent Track Record of Beating Expectations

What stands out most to Sushmita Roy is Alcoa’s remarkable ability to exceed market forecasts consistently. The company has beaten earnings expectations in each of the last four quarters, with an average surprise of 39.3%—most notably a stunning 86.7% beat in the most recent quarter. This track record isn’t random; it reflects management’s disciplined execution and operational excellence.

According to Roy’s analysis, Alcoa’s Earnings ESP (Earnings Surprise Prediction) stood at +0.53%, suggesting the Most Accurate Estimate of 96 cents per share exceeded the consensus figure of 95 cents. This positive signal, combined with the company’s Zacks Rank #1 (Strong Buy) rating, historically correlates with stronger-than-expected results and potential stock outperformance.

Valuation Advantage: Why Alcoa Looks Attractive on Price Metrics

Before diving into business fundamentals, Sushmita Roy highlights a critical advantage: valuation. Alcoa trades at a forward 12-month P/E ratio of 12.50X, sitting slightly below the Metal Products - Distribution industry average of 12.82X. This discount becomes more meaningful when compared to direct competitors—Constellium SE trades at 12.94X while Ryerson Holding Corp. commands a significantly higher multiple at 21.56X.

This modest valuation discount provides a margin of safety while the company pursues growth initiatives, making it an opportune entry point for value-conscious investors.

The Real Growth Drivers: What’s Behind the Momentum

Sushmita Roy identifies several concrete factors propelling Alcoa’s business forward:

The Aluminum Segment Renaissance: Elevated demand for aluminum products across electrical and packaging end markets in North America and Europe has created tailwinds. Critically, Alcoa is expanding production capacity at its San Ciprián facility in Spain through a joint venture with IGNIS EQT initiated in March 2025. The consensus mark for aluminum segment revenues reaches $2.45 billion in Q4, representing a robust 29% year-over-year increase—a significant growth catalyst.

Alumina Segment Headwinds and Opportunities: The Alumina division faces near-term pressure, with consensus estimates at $1.32 billion (a 46% decline year-over-year) due to lower shipments and temporary curtailment of the Kwinana refinery in Australia. However, Roy notes that growing demand for Alcoa’s proprietary Sustana product line and increased production at other Australian refineries provide counterbalance.

Transformative Acquisitions Paying Off: Alcoa’s August 2024 acquisition of Alumina Limited represents a strategic masterstroke, transforming the company into a pure-play aluminum producer with expanded upstream capabilities. This consolidation amplifies operational synergies and reduces supply chain vulnerability—advantages that Roy sees as increasingly valuable in volatile commodity markets.

The Tariff Catalyst Everyone’s Watching

Here’s where Sushmita Roy sees the real hidden value: in June 2025, the U.S. administration implemented a landmark 50% tariff on imported aluminum. While protectionist trade policies often face criticism, Roy argues this specific measure significantly benefits domestic producers like Alcoa. Higher aluminum prices translate directly into improved margins for domestic smelters and refineries, providing a substantial earnings boost that extends well beyond Q4.

Stock Momentum Validates the Thesis

The market has already begun recognizing these positives. Alcoa’s shares surged 54.2% over the past three months—outpacing its Metal Products - Distribution industry peer group’s 49.9% gain and dramatically outperforming the S&P 500’s modest 4.2% increase. Meanwhile, direct competitors lagged: Constellium gained 38.9% and Ryerson Holding gained 24.9% in the same window. This relative outperformance suggests the market is pricing in Alcoa’s superior execution.

The Investment Case: Why Sushmita Roy Sees Upside Potential

Combining all these elements, Roy’s investment thesis becomes clear. Alcoa possesses a diversified product portfolio positioned at the intersection of megatrends—electric vehicle adoption, battery technology advancement, and the shift toward lightweight materials drives persistent aluminum demand. The company’s strategic partnerships and acquisition discipline create a competitive moat, while geopolitical support (the aluminum tariff) provides a tailwind extending years into the future.

Alcoa’s valuation remains reasonable, earnings surprise track record proves management’s capability, and growth catalysts are concrete rather than speculative. For investors seeking exposure to aluminum demand growth with downside protection through conservative valuation, Roy believes Alcoa represents a compelling opportunity worthy of portfolio consideration. The combination of solid fundamentals, positive analyst sentiment, and demonstrated operational excellence positions AA as a name to watch in the industrial materials sector.