Gabelli Downgrades Alcoa (AA) to Hold

Gabelli analyst Justin Bergner downgraded Alcoa (NYSE: AA) from Buy to Hold with a price target of $32.00.

The analyst comments "We see Acloa’s +12% two day post-earnings move reflected better than expected proceeds from non-core asset sales and a view that estimates have bottomed. We now see aluminum as challenged given expected market growth of 3% “at risk of” 2% with increased Chinese scrap, and against 1-2% capacity creep. Alcoa only wants top quartile assets and now is selling non-core assets to fund ~$600mm of cash outflows in 2019/2020 tied to cash operating losses, pension, and legacy liabilities. A recession could make matters worse. We change to Hold despite a 35% discount to our 2020P PMV of $32."

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 $21.75 yesterday.

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