JPMorgan analysts have lowered their rating on Alcoa to underweight, citing stretched valuation metrics relative to both historical averages and peer group multiples. The bank highlighted that aluminum prices have underperformed copper over the past six months, with aluminum inventories at the London Metal Exchange up 18% year-to-date, putting pressure on spreads. While JPMorgan remains constructive on the broader base-metals complex, it argues that Alcoa’s current earnings multiple at roughly 12x forecast EBITDA is rich compared to the 8–10x range that has preceded past price corrections in the sector.

Following a multi-year dominance of technology stocks in investor portfolios, Alcoa has begun to attract renewed attention as a beneficiary of the so-called reconstruction trade. Since the start of 2026, the stock has outperformed the S&P 500 Materials sector by approximately 15%, driven by expectations of increased infrastructure spending in North America and Europe. Supply-side constraints in key alumina refineries are anticipated to trim global aluminum output by 3% next year, according to industry consultants, potentially supporting higher realizations. Investors are watching closely for the company’s upcoming capital allocation plan, which is expected to outline accelerated maintenance spending and a more disciplined approach to dividend growth.