PITTSBURGH, PA – JANUARY 7: Alcoa employees leave Alcoa corporate headquarters January 7, 2009 in … [+] Pittsburgh, Pennsylvania. Alcoa announced they would layoff 13 percent of their workforce, or 13,500 employees worldwide. (Photo by Jeff Swensen/Getty Images)
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Alcoa Corporation
AA
is scheduled to report earnings after Thursday’s close. The stock hit a record high of $117.19 in 2007 and is currently trading near $50/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

Alcoa is expected to earn $1.85/share on $2.91 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $1.94/share. The Whisper number is the Street’s unofficial view on earnings.

Charts Courtesy MarketSmith Incorporated
Charts Courtesy MarketSmith Incorporated

A Closer Look At The Fundamentals:

Fundamentally, the company has turned the corner and has posted very strong sales and earnings growth over the past few quarters. The company lost money in 2020 but is on track to be very profitable in 2021 and 2022. Investors like to earnings grow and the fact that Alcoa is now profitable bodes well for the near future.

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A Closer Look At The Chart:

Technically, the stock is acting great and continues trading above its ascending 50 day moving average line and just below its 52-week high. The relative strength line is also about to hit a new high which means that the stock is acting very strong and out performing the benchmark S&P 500 and most of its peers.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news.

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