Alcoa (AA) PT Bumped to $9.50 at UBS Following Investor Day

November 8, 2013 11:48 AM EST
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Price: $35.42 +1.75%

Rating Summary:
    15 Buy, 13 Hold, 3 Sell

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    Up: 23 | Down: 34 | New: 34
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UBS reiterated an Neutral rating but bumped its price target on c (NYSE: AA) from $8.75 to $9.50 following the company investors day.

At the event the company announced three year revenue, EBITDA and cost curve goals. The analyst notes: "AA envisages reaching the 21st and 38th percentiles on the alumina and aluminum cost curves, respectively, by 2016. In global rolled products, revenue growth over the next 3-years has been pegged at $1bn (using flat $1,872/mt aluminum) at a higher EBITDA margin. Similarly, engineered products and solutions is expected to realize incremental revenue of $1.2bn at an EBITDA margin above its historical average."

He adds, "Despite realizing $5.5bn in productivity gains over 2009-2012 and a further $825mn YTD (already exceeding the $750mn goal for 2013), AA believes that sustained improvements are possible going forward. With a standardized process to act on ~17,000 cost saving ideas that have been identified to date, management expects additional gains over the next three years and beyond. Of note, 2013 sustaining capex guidance has been revised to $725mn from $1bn and AA continues to guide for positive free cash flow for the year."

For an analyst ratings summary and ratings history on Alcoa click here. For more ratings news on Alcoa click here.

Shares of Alcoa closed at $8.95 yesterday.

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