Alcoa Inc. (NYSE: AA) may no longer be a Dow Jones Industrial Average component, but it is still the first of the large stocks that the stock market tries to use as an earnings season indicator or as an economic indicator. Its earnings are due after the close of trading on Tuesday. The aluminum giant was down about 5% or so from its high of the year, but going into Tuesday its shares were still up by more than 17% since the end of 2013.

Thomson Reuters has estimates of $0.05 in earnings per share (EPS) and $5.55 billion in revenue. This compares to $0.04 EPS in the previous quarter and to $0.11 EPS in the same quarter a year ago. The revenue comparison would be down almost 5% year over year, but note that Alcoa keeps “right-sizing” its production to keep a balance between supply and demand.

Alcoa often does not give guidance until its conference call. The estimates for the quarter ahead, the current quarter that is, are $0.10 EPS and a for a 1.7% drop in revenue to $5.75 billion.

The big question is whether we get guidance for all of 2015, considering that the global economy remains choppy and the strong point is really only the U.S. right now. Thomson Reuters has the consensus estimates for 2014 as $0.37 EPS (versus $0.33 in 2013) and revenue of $23.04 billion (flat versus 2013).

So, with the market backing away after hitting all-time highs just last Friday, what does this 17.6% gain translate to in valuation? Alcoa would be valued at 33 times expected earnings, but this valuation is “only” 22-times expected 2015 earnings. The question to ask is just how much of a value this should trade at, even in a turnaround.

Alcoa’s turnaround has been going for years now, and 22 times next year’s earnings while we are barely in the second quarter of this year is a leap of faith. Maybe if it cuts costs enough then it can project a handy beating of expectations ahead. If not, let’s just say that the $12.47 price is up a whopping 63% from the 52-week low of $7.63.

Analysts are not exactly ahead of Alcoa here. In fact, the stock rose above and beyond what the pack of analysts thinks it is worth. The consensus price target at Thomson Reuters is lower than the stock price — down at $10.73. Deutsche Bank raised Alcoa to Hold from Sell just on Monday. Sterne Agee’s made a case for why Alcoa would go to $15.

At the start of 2014, we also gave the bullish and bearish case for Alcoa in 2014. We would also point out that the rise in the stock price has Alcoa’s dividend yield as being only about 1%. Alcoa’s dividend has remained the same $0.03 per share per quarter since it was lowered from $0.17 per share per quarter back in the recession in 2009.

Alcoa’s stock chart remains strong, despite the market sell-off of late. After shares closed at $12.47, the 50-day moving average is $11.90, and note that Alcoa has not violated the 50-day moving average in six months. Also, its 200-day moving average is all the way down at $9.60.

Options traders rarely give much of a telegraphed major expected move for Alcoa’s earnings. That being said, the closest volatility trade is factoring in less than a 6% move in either direction. If you go out a tad from the same strike prices, the move is priced in for less than a 4% stock move in either direction.

The market stabilization is adding fuel to Alcoa’s trading before the earnings report. Alcoa shares were up almost 2% at $12.70 shortly after the open on Tuesday morning.

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