Nomura Securities Reiterates a 'Neutral' on Alcoa (AA); Hard to Paint a Bullish Picture

July 10, 2012 8:06 AM EDT
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Nomura Securities reiterates a 'Neutral' on Alcoa (NYSE: AA) price target of $12.00.

Analyst, Curt Woodworth, said, "We believe that it is hard to paint a bullish near-term picture for Alcoa, despite continued downstream improvements and given our view that downside for aluminum is limited from here, owing to the structural oversupply of aluminum in the west capping the upside to any potential price moves. At current LME spot prices, we estimate that ~40% of global smelters are underwater. Given the weak upstream environment, we believe downstream will provide ~60% of EBITDA in 2012. However, with downstream margins already at record levels, we have more concern over whether Alcoa can continue to improve these segments; given global PMI suggests a weaker growth outlook."

Woodworth raises FY12 EPS estimate from $0.20 to $0.25.

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 $8.76 yesterday.

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