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Deutsche Bank Downgrades Alcoa (AA) to Sell; Price Target Slashed

October 2, 2013 7:03 AM EDT Send to a Friend
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Price: $15.83 -2.34%

Rating Summary:
    9 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 12
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Deutsche Bank downgraded Alcoa (NYSE: AA) from Hold to Sell and slashed its price target from $9 to $5.50 citing a deteriorating outlook on lower aluminum deck.

"Our downgrade is primarily driven by DB's lower medium-term aluminum price outlook (12-13% lower in 2014-15 to $0.82 and $0.88/lb, respectively), which cuts 2014E and 2015E EPS by over half," analyst Jorge Beristain notes.

Alcoa should consider spinning off its Primary aluminum business to reduce its negative drag and maximize equity value, the analyst said. "[W]e envision a stock decline could serve as an impetus for change," according to Beristain.

The firm cut FY 2013 EPS from $0.46 to $0.27 and revenue estimates from $23.3677 billion to $22.903 billion.

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 $8.17 yesterday.




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