Goldman Sachs Maintains Bullish Stance on Alcoa (AA)

Goldman Sachs maintained a Buy rating on Alcoa (NYSE: AA) with a price target of $15.00. Comments follow Q1 results.

Analyst Sal Tharani said, "We see 2014 as a year of transition for Alcoa as it executes the announced curtailments of its Brazilian operations (147K mt) and closures of Australian Pt. Henry (190K) and Massena East smelters (84K), which are all high cost money losing assets. These actions should considerably improve its margins in Primary Metals Divisions. We believe that there are other high cost capacities (like Mt. Holly in the US) that will be further targeted by the company as it moves towards its goal to get to 38th percentile on the global aluminum cost curve by 2016 from 51st percentile in 2010. In fact, its aggressive actions lead us to believe that it will exceed its target. But this is just half of the story to support our bullish view on Alcoa."

'We believe that Alcoa has strongly positioned itself to fully benefit from the growing downstream aluminum end markets, aerospace and automotive, where we see multi-year positive trends with both top line and bottom line growth. We believe that the BiW market has more growth ahead and see AA remaining a leader in this end market," he added.

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 $12.53 yesterday.

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