JPMorgan Cuts Alcoa (AA) to Neutral, PT to $9; Few Catalysts for Growth Moving Forward
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Price: $35.61 +0.39%
Rating Summary:
15 Buy, 14 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
15 Buy, 14 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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(Updated - July 3, 2013 9:18 AM EDT)
Alcoa (NYSE: AA) is lower on the session following a downgrade at JPMorgan earlier. The firm took Alcoa from Buy to Neutral, while its $12 price target was lowered with a December 2014 target of $9.
JPMorgan analyst Mike Gambardella said the move comes following an outlook by the firm's internal strategist on aluminum price expectations. He comments, "Our metal strategists recently lowered their 2013 aluminum price forecast to $0.89/b from $0.94/lb and 2014 forecast to $0.93/lb from $1.06/lb." Though demand is firm, supply is still outperforming, he said.
Gambardella continued that, aside from a material improvement in aluminum prices or an increase in investor sentiment, there are few catalysts for Alcoa moving forward.
Estimates for FY13 and FY14 EPS move from $0.57 and $1.04 down to $0.29 and $0.55, respectively.
The new price target is based on "2014E EV/EBITDA multiple of 7.0x (previous target based on 6.5x our 2014 EBITDA), which compares to AA’s average forward multiple of 7.4x since 2002."
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 $7.80 yesterday.
Alcoa (NYSE: AA) is lower on the session following a downgrade at JPMorgan earlier. The firm took Alcoa from Buy to Neutral, while its $12 price target was lowered with a December 2014 target of $9.
JPMorgan analyst Mike Gambardella said the move comes following an outlook by the firm's internal strategist on aluminum price expectations. He comments, "Our metal strategists recently lowered their 2013 aluminum price forecast to $0.89/b from $0.94/lb and 2014 forecast to $0.93/lb from $1.06/lb." Though demand is firm, supply is still outperforming, he said.
Gambardella continued that, aside from a material improvement in aluminum prices or an increase in investor sentiment, there are few catalysts for Alcoa moving forward.
Estimates for FY13 and FY14 EPS move from $0.57 and $1.04 down to $0.29 and $0.55, respectively.
The new price target is based on "2014E EV/EBITDA multiple of 7.0x (previous target based on 6.5x our 2014 EBITDA), which compares to AA’s average forward multiple of 7.4x since 2002."
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 $7.80 yesterday.
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