BofA/Merrill Lynch Downgrades Alcoa (AA) to Neutral

BofA/Merrill Lynch downgraded Alcoa (NYSE: AA) from Buy to Neutral with a price target of $17.00 (from $20.00) on a lower aluminum price outlook.

Analyst Timna Tanners notes pressure from LME warehouse rules changes and Chinese exports have hurt at least the near-term aluminum outlook , eroding the premium after its TTM strength. A strong dollar can push prices down further.

"We still think aluminum can be more defensive vs other commodities, yet no longer expect falling premiums can be offset by LME price strength near term," the analyst said.

The firm cut FY 2015 EPS from $1.30 to $1.15, FY 2016 EPS from $1.55 to $1.15 and FY 2017 EPS from $1.75 to $1.20.

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 $15.18 yesterday.

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