Deutsche Bank Upgrades Alcoa (AA) to Hold
AA Hot Sheet
Rating Summary:6 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Deutsche Bank upgrades Alcoa (NYSE: AA) from Sell to Hold.
Deutsche analyst says, "We have revised our earnings estimates for our coverage universe to incorporate Deutsche Bank's updated commodity forecasts and change ratings on two key stocks: we now rate FCX a Sell based on a recent sharp rally and our expectation of weaker copper prices ahead, while we raise Alcoa's rating from Sell to Hold to reflect the likelihood that refinancing fears have been pushed into 1H10 following ~US$2bn of asset sales/equity placements in March...We also note that one of the main reasons we have been negative on the metals space since the fall of 2008 is fear that dividends would be cut and many companies would have to raise dilutive primary equity after shares fell 80-90% to re-pay looming debt maturities and avoid covenant violations. Since then dividends have indeed been slashed (Alcoa, FCX), and four companies (Alcoa, CDE, FCX and SSO) have raised new equity in the past three months, which will likely see them through 1H10. Stocks have tended to sell off ahead of an impending capital raise, but have rallied quite strongly shortly thereafter, once the financial overhang has been removed."
To see more analyst ratings on AA Click Here.
Alcoa Inc. (Alcoa) is engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined.
Deutsche analyst says, "We have revised our earnings estimates for our coverage universe to incorporate Deutsche Bank's updated commodity forecasts and change ratings on two key stocks: we now rate FCX a Sell based on a recent sharp rally and our expectation of weaker copper prices ahead, while we raise Alcoa's rating from Sell to Hold to reflect the likelihood that refinancing fears have been pushed into 1H10 following ~US$2bn of asset sales/equity placements in March...We also note that one of the main reasons we have been negative on the metals space since the fall of 2008 is fear that dividends would be cut and many companies would have to raise dilutive primary equity after shares fell 80-90% to re-pay looming debt maturities and avoid covenant violations. Since then dividends have indeed been slashed (Alcoa, FCX), and four companies (Alcoa, CDE, FCX and SSO) have raised new equity in the past three months, which will likely see them through 1H10. Stocks have tended to sell off ahead of an impending capital raise, but have rallied quite strongly shortly thereafter, once the financial overhang has been removed."
To see more analyst ratings on AA Click Here.
Alcoa Inc. (Alcoa) is engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined.
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