Alcoa heads into the week of June 9 with short sellers quietly rebuilding positions into a sharp pullback — a divergence worth watching as the Street grows more constructive.
The most striking development in the data is the speed of the short interest rebuild. Short interest jumped 25% in one week to 2.5% of the free float — the highest level in roughly a month — after spending much of May winding down from peaks above 2.6% reached in early May. That move happened against a stock that fell 13.6% on the week to $72.41, retracing a large chunk of the 14.6% gain posted over the prior month. The borrow market itself tells a different story: cost to borrow collapsed to just 0.14% from around 0.42% the week before, and availability is extraordinarily loose at over 8,400% — meaning for every share currently borrowed, more than 84 are sitting in the lending pool. Shorts are adding, but they are doing so cheaply and easily. This is not a squeeze setup. Options positioning corroborates the muted pressure: the put/call ratio eased to 0.92 after briefly touching 1.09 earlier in the week, only marginally above its 20-day average of 0.88 and well within normal range. Positioning looks cautious rather than crowded.
The Street's direction of travel is notably more bullish than the price action this week suggests. UBS upgraded Alcoa to Buy on May 22, lifting its target to $80, and Wells Fargo moved to Overweight in early May with a $70 target. Morgan Stanley had already upgraded to Overweight in April, setting an $80 objective. The mean analyst target now sits at $82.33, implying roughly 14% upside from Tuesday's close — a gap that has widened as the stock sold off. JP Morgan, the more cautious voice among the large banks, has maintained a Neutral rating but has been steadily raising its target, from $50 in March to $70 by April. The analyst recommendation differential factor ranks in the 99th percentile of the ORTEX universe, reflecting an unusually strong tilt toward positive revisions. Valuation multiples show the stock trading at a PE of 9.3x and EV/EBITDA of 5.4x, both of which have compressed over the past week alongside the price fall. The EPS momentum score ranks in the 87th percentile on a 90-day basis, suggesting estimate revisions remain supportive even as the stock retreats.
The selloff is sector-wide rather than Alcoa-specific. Close peer CENX dropped 11.4% on the week — nearly matching Alcoa's move — while FCX lost 10.4% and NEM fell 10%. The materials complex is pulling back broadly, which limits the signal from Alcoa's own price action. FMR (Fidelity) stands out among institutional holders after adding nearly 7.9 million shares in the most recent reported period, bringing its stake to 4.85% of the company — a meaningful accumulation that suggests at least one large active manager was buying into the earlier dip.
Alcoa reports Q2 results on July 15. The prior earnings print on April 16 saw the stock fall 6.8% on the day and an additional 0.4% over the following five sessions. The Q1 update in May, by contrast, recovered quickly with a 8.5% five-day gain after a flat initial reaction. With the stock having given back much of its post-tariff recovery and the short-rebuild now underway, how aluminum prices and cost guidance develop into that July date will determine whether the current analyst upgrade cycle has legs.
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