Alcoa Corporation

Basic MaterialsAluminumNYSE

$63.17

Market Cap: $16.67B

Alcoa Corporation (AA) Valuation Summary

Updated Apr 21, 2026 22:13

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$31.61 – $131.27	$50.86	-24.3%
Growth Exit 10Y	$31.89 – $119.77	$49.15	-26.8%
EBITDA Exit 5Y	$31.06 – $88.40	$57.29	-14.7%
EBITDA Exit 10Y	$31.07 – $82.79	$52.96	-21.1%
▸ Trading Multiples
P/E	$63.30 – $125.96	$86.49	+28.8%
EV/EBITDA	$42.85 – $76.65	$50.20	-25.2%
EV/Revenue	$66.72 – $410.14	$108.24	+61.2%
▸ PEG
PEG Fair Value	$126.47 – $126.47	$126.47	+88.3%
▸ Earnings Power Value
Earnings Power Value	$27.80 – $41.68	$33.49	-50.1%
▸ Dividend Discount
Dividend Discount	$8.08 – $19.40	$12.12	-82.0%

Valuation History

DCF Analysis

Fair Value

$50.86

Market Price

$63.17

Upside / Downside

-19.5%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Alcoa Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 16.2% to 4.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 31, DPO 61, DIO 74). At a 8.4% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 3.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $50.86 per share, suggesting AA is overvalued by 19.5% at the current price of $63.17.

FCFF Present Value Calculation

WACC

8.37%

3% – 20%

Terminal Growth

3.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,384	1,391	1,375	1,377	1,436	1,487
(−) Net Interest	175	176	174	174	182	188
(+) D&A	520	569	601	621	631	653
EBITDA	2,079	2,136	2,150	2,171	2,249	2,328

(−) Tax	692	695	687	688	718	743
(−) CapEx	635	639	631	632	659	682
(−) ΔWC	209	9	-20	2	74	77
Free Cash Flow (FCFF)	543	793	851	849	797	825

Terminal Value						16,937
WACC / Discount Rate	8.4%
Long-term Growth Rate	3.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	522	703	696	641	555	11,330

Enterprise Value	14,447
Projection Period	3,117	21.6%
Terminal Value	11,330	78.4%

(−) Current Net Debt	1,055

Equity Value	13,392
(/) Outstanding Shares	263

Fair Price	$50.86

Sensitivity Analysis

WACC \ Terminal Growth Rate	2.5%	3.0%	3.5%	4.0%	4.5%
6.4%	$68	$77	$89	$105	$131
7.4%	$53	$58	$65	$73	$85
8.4%	$44	$47	$51	$56	$62
9.4%	$37	$39	$42	$45	$49
10.4%	$32	$33	$35	$37	$40

Current price: $63.17. Green = undervalued, Red = overvalued.

Fair Value

$49.15

Market Price

$63.17

Upside / Downside

-22.2%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Alcoa Corporation's cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 16.2% to 2.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 31, DPO 61, DIO 74). At a 8.4% WACC with mid-year discounting, the terminal value (61% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 3.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $49.15 per share, suggesting AA is overvalued by 22.2% at the current price of $63.17.

FCFF Present Value Calculation

WACC

8.37%

3% – 20%

Terminal Growth

3.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,384	1,391	1,375	1,377	1,436	1,451	1,471	1,497	1,530	1,570	1,625
(−) Net Interest	175	176	174	174	182	184	186	189	194	199	206
(+) D&A	520	569	601	621	631	639	645	653	664	678	702
EBITDA	2,079	2,136	2,150	2,171	2,249	2,273	2,302	2,340	2,388	2,447	2,532

(−) Tax	692	695	687	688	718	725	735	749	765	785	813
(−) CapEx	635	639	631	632	659	666	675	687	702	721	746
(−) ΔWC	209	9	-20	2	74	18	25	33	41	49	51
Free Cash Flow (FCFF)	543	793	851	849	797	865	867	871	879	892	923

Terminal Value											18,940
WACC / Discount Rate	8.4%
Long-term Growth Rate	3.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	522	703	696	641	555	556	514	476	444	415	8,475

Enterprise Value	13,997
Projection Period	5,522	39.4%
Terminal Value	8,475	60.6%

(−) Current Net Debt	1,055

Equity Value	12,942
(/) Outstanding Shares	263

Fair Price	$49.15

Sensitivity Analysis

WACC \ Terminal Growth Rate	2.5%	3.0%	3.5%	4.0%	4.5%
6.4%	$68	$75	$85	$99	$120
7.4%	$53	$57	$62	$69	$78
8.4%	$44	$46	$49	$53	$57
9.4%	$37	$39	$40	$43	$45
10.4%	$32	$33	$34	$36	$38

Current price: $63.17. Green = undervalued, Red = overvalued.

Fair Value

$57.32

Market Price

$63.17

Upside / Downside

-9.3%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Alcoa Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 16.2% to 4.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 31, DPO 61, DIO 74). At a 8.4% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $57.29 per share, suggesting AA is fairly valued by 9.3% at the current price of $63.17.

FCFF Present Value Calculation

WACC

8.37%

3% – 20%

EV/EBITDA Exit Multiple

8.45x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,384	1,391	1,375	1,377	1,436	1,472
(−) Net Interest	175	176	174	174	182	186
(+) D&A	520	569	601	621	631	647
EBITDA	2,079	2,136	2,150	2,171	2,249	2,305

(−) Tax	692	695	687	688	718	—
(−) CapEx	635	639	631	632	659	—
(−) ΔWC	209	9	-20	2	74	—
Free Cash Flow (FCF)	543	793	851	849	797	—

Peers' EBITDA Multiple						8.4x
Terminal Value						19,480
WACC / Discount Rate	8.37%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	522	703	696	641	555	13,031

Enterprise Value	16,148
Projection Period	3,117	19.3%
Terminal Value	13,031	80.7%

(−) Current Net Debt	1,055
Equity Value	15,093
(÷) Outstanding Shares	263M
Fair Price	$57	-9.3%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
6.4%	$37	$50	$63	$76	$88
7.4%	$35	$48	$60	$72	$84
8.4%	$34	$46	$57	$69	$81
9.4%	$32	$44	$55	$66	$77
10.4%	$31	$42	$52	$63	$74

Current price: $63.17. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$52.98

Market Price

$63.17

Upside / Downside

-16.1%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Alcoa Corporation's cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 16.2% to 2.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 31, DPO 61, DIO 74). At a 8.4% WACC with mid-year discounting, the terminal value (63% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $52.96 per share, suggesting AA is overvalued by 16.2% at the current price of $63.17.

FCFF Present Value Calculation

WACC

8.37%

3% – 20%

EV/EBITDA Exit Multiple

8.45x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,384	1,391	1,375	1,377	1,436	1,451	1,471	1,497	1,530	1,570	1,609
(−) Net Interest	175	176	174	174	182	184	186	189	194	199	204
(+) D&A	520	569	601	621	631	639	645	653	664	678	695
EBITDA	2,079	2,136	2,150	2,171	2,249	2,273	2,302	2,340	2,388	2,447	2,508

(−) Tax	692	695	687	688	718	725	735	749	765	785	—
(−) CapEx	635	639	631	632	659	666	675	687	702	721	—
(−) ΔWC	209	9	-20	2	74	18	25	33	41	49	—
Free Cash Flow (FCF)	543	793	851	849	797	865	867	871	879	892	—

Peers' EBITDA Multiple											8.4x
Terminal Value											21,192
WACC / Discount Rate	8.37%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	522	703	696	641	555	556	514	476	444	415	9,483

Enterprise Value	15,005
Projection Period	5,522	36.8%
Terminal Value	9,483	63.2%

(−) Current Net Debt	1,055
Equity Value	13,950
(÷) Outstanding Shares	263M
Fair Price	$53	-16.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	4.4x	6.4x	8.4x	10.4x	12.4x
6.4%	$42	$52	$62	$73	$83
7.4%	$39	$48	$57	$67	$76
8.4%	$36	$44	$53	$61	$70
9.4%	$33	$41	$49	$57	$64
10.4%	$31	$38	$45	$52	$59

Current price: $63.17. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$89.33

Market Price

$63.17

Upside / Downside

+41.4%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Alcoa Corporation (AA) has a fair value of $89.33 based on 6 comparable companies in the Aluminum industry.

P/E Valuation — Aluminum

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Alcoa CorporationAA	16,633	14.2x	8.8x
Hecla Mining CompanyHL	12,127	36.9x	43.6x
Coeur Mining, Inc.CDE	11,843	20.5x	8.5x
IAMGOLD CorporationIAG	9,926	14.5x	6.7x
Eastman Chemical CompanyEMN	8,286	17.7x	9.5x
The Mosaic CompanyMOS	7,684	14.2x	15.3x
ICL Group LtdICL	6,711	28.9x	13.3x
Industry Median		19.1x	11.4x
(*) Profit after tax		1,148	1,895
Equity Value		21,905	25,134
(/) Outstanding shares		263	263
Fair Price		$83	$95

Selected Fair Value (avg of trailing + forward)

$89.33

+41.4%

Fair Value

$50.48

Market Price

$63.17

Upside / Downside

-20.1%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Alcoa Corporation (AA) has a fair value of $50.48 based on 6 comparable companies in the Aluminum industry.

EV/EBITDA Valuation — Aluminum

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Alcoa CorporationAA	16,633	9.5x	8.1x
Hecla Mining CompanyHL	12,127	17.2x	18.4x
Coeur Mining, Inc.CDE	11,843	11.4x	4.0x
IAMGOLD CorporationIAG	9,926	6.6x	4.7x
Eastman Chemical CompanyEMN	8,286	9.9x	9.2x
The Mosaic CompanyMOS	7,684	4.9x	4.5x
ICL Group LtdICL	6,711	7.0x	7.2x
Industry Median		8.4x	5.9x
(*) EBITDA		1,864	2,189
= Enterprise Value		15,742	12,949
(-) Net Debt		1,055	1,055
Equity Value		14,687	11,894
(/) Outstanding shares		263	263
Fair Price		$56	$45

Selected Fair Value (avg of trailing + forward)

$50.48

-20.1%

Fair Value

$108.78

Market Price

$63.17

Upside / Downside

+72.2%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Alcoa Corporation (AA) has a fair value of $108.78 based on 8 comparable companies in the Aluminum industry.

EV/Revenue Valuation — Aluminum

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Alcoa CorporationAA	16,633	1.4x	1.2x
Westlake CorporationWLK	14,813	1.7x	1.5x
Hecla Mining CompanyHL	12,127	8.6x	9.1x
Coeur Mining, Inc.CDE	11,843	5.6x	2.0x
MP Materials Corp.MP	11,683	42.0x	24.2x
IAMGOLD CorporationIAG	9,926	3.6x	2.5x
Eastman Chemical CompanyEMN	8,286	1.5x	1.4x
The Mosaic CompanyMOS	7,684	1.1x	1.0x
ICL Group LtdICL	6,711	1.3x	1.3x
Industry Median		2.6x	1.7x
(*) Revenue		12,736	14,960
= Enterprise Value		33,256	26,139
(-) Net Debt		1,055	1,055
Equity Value		32,201	25,084
(/) Outstanding shares		263	263
Fair Price		$122	$95

Selected Fair Value (avg of trailing + forward)

$108.78

+72.2%

PEG Fair Value

Fair Value

$126.47

Market Price

$63.17

Upside / Downside

+100.2%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 18.7% plus 0.6% dividend yield, the company has a fair value of $126.47 based on NTM EPS (FY2026) of $6.77. The current PEG ratio is 0.53.

PEG Ratio

0.53Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.9 ÷ (18.1% + 0.6%) = 0.53

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG highly applicable

PEG is most informative for high-growth companies — the PEG sweet spot.

Fair Value Calculation

EPS Growth RateForward	18.1%
Dividend Yield	+0.6%
Adjusted Growth (clamped 8–25%)	18.7%
Fair P/E	18.7x
NTM EPS (FY2026)	$6.77
Fair Value	$126.47

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$4.44	—	—
FY2026E	$6.77	+52.5%	10
FY2027E	$6.90	+1.9%	10
FY2028E	$7.31	+6.0%	10

3Y Forward EPS CAGR: 18.1%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$429.0M	$2.26	—
FY2022	$-123.0M	$-0.57	-125.2%
FY2023	$-651.0M	$-3.65	—
FY2024	$60.0M	$0.28	—
FY2025	$1.1B	$4.44	+1485.7%

4Y Historical EPS CAGR: 18.4%

Earnings Power Value

Fair Value

$33.49

Market Price

$63.17

Upside / Downside

-47.0%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 8.4% and normalized earnings of $826.8M, the company has a fair value of $33.49 per share. The EPV range is $27.80 – $41.68 based on WACC sensitivity (6.9% – 9.9%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	827	827	827
(/) WACC	9.9%	8.4%	6.9%
Enterprise Value	8,374	9,874	12,029
(-) Net debt	1,055	1,055	1,055
Equity Value	7,319	8,819	10,974
(/) Outstanding shares	263	263	263
Fair Price	$27.80	$33.49	$41.68

Dividend Discount Model

Fair Value

$12.12

Market Price

$63.17

Upside / Downside

-80.8%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.0% and projected dividend growth of 15.0%, the fair value is $12.12 per share. The DDM range is $8.08 – $19.40 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.39

Dividend Yield

0.59%

Payout Ratio

9.1%

Dividend Coverage

11.04x

FCF Payout Ratio18.3%

DPS CAGR (4Y)41.0%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.39	9.1%	-5.0%
2024	$0.42	148.3%	+2.8%
2023	$0.40	—	+1.7%
2022	$0.40	—	+297.8%
2021	$0.10	4.4%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.45	15.0%	0.9177	$0.42
2027	$0.52	15.0%	0.8422	$0.44
2028	$0.60	15.0%	0.7729	$0.46
2029	$0.69	15.0%	0.7093	$0.49
2030	$0.79	15.0%	0.6509	$0.52
Terminal Value	$0.82 DPS	3.5%		$9.79

PV of Projected Dividends$2.33

PV of Terminal Value$9.79

Fair Value per Share$12.12

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	13.0%	14.0%	15.0%	15.0%	15.0%
7.0%	$18	$19	$19	$19	$19
8.0%	$14	$14	$15	$15	$15
9.0%	$11	$12	$12	$12	$12
10.0%	$9	$10	$10	$10	$10
11.0%	$8	$8	$9	$9	$9

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.