How Is Alcoa Likely To Grow In The Next 2 Years?

by Trefis Team
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Alcoa (NYSE: AA) displayed significant growth in revenue in the last year. Revenue growth was largely driven by a rise in the prices of both alumina and aluminum, Alcoa’s primary product offerings. Prices of the primary metals were boosted due to several macroeconomic factors such as a production curtailment in China, an anticipated increase in aluminum tariffs in the U.S., and a general enhanced demand environment for aluminum. Similar factors boosted the demand for alumina as well. However, going forward, we expect aluminum prices to be rangebound at similar levels as that of 2017, and estimate shipment volume to remain fairly stable. Hence, revenue is expected to grow at a CAGR of 4% over the next two years. We have built an explanatory dashboard to outline the major drivers of revenue over the next two  years.

As per our analysis, we believe that all reported segments of the company will report stable growth. The aluminum segment of the company is expected to display a negative growth as a result of lower shipment guidance released by the company. The alumina segment is expected to remain a fair highlight, with comparatively higher shipment guidance.

Our detailed shipment and price estimates have been highlighted in our dashboard. You can make changes to our assumed figures to arrive at your own revenue and growth estimates for the company.


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