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Alcoa Corp is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock lacks significant positive catalysts, has mixed analyst sentiment, and shows no clear technical or proprietary trading signals. Holding off for now is recommended.
The MACD histogram is negative (-0.405) and contracting, RSI is neutral at 48.489, and moving averages are converging, indicating no clear trend. The stock is trading near its pivot level (59.961) with support at 56.241 and resistance at 63.682, suggesting limited immediate upside potential.
Alcoa has partnered with the Australian government for modernizing mining approvals, showing a commitment to environmental sustainability. The company reported an 11.88% YoY increase in net income and a 13.16% YoY increase in EPS for Q4 2025.
Revenue dropped by -1.06% YoY, and gross margin declined significantly by -28.61% YoY. Analysts have mixed views, with recent downgrades citing valuation concerns and balanced risk-reward. Environmental compliance issues in Australia led to a $19 million charge and a $55 million restoration payment. Broader market sentiment is cautious, and Alcoa's stock has underperformed recently.
In Q4 2025, revenue dropped to $3.45 billion (-1.06% YoY), while net income increased to $226 million (+11.88% YoY). EPS rose to 0.86 (+13.16% YoY), but gross margin fell to 12.55% (-28.61% YoY), indicating profitability challenges despite income growth.
Analyst sentiment is mixed. Morgan Stanley downgraded the stock to Equal Weight with a price target of $64, citing balanced risk-reward. B. Riley raised its price target to $78, maintaining a Buy rating, while BMO Capital lowered its target to $65, citing mixed alumina targets. JPMorgan downgraded the stock to Underweight with a $50 target, citing valuation concerns.
