Dahlman Rose Cuts Price Target on Alcoa (AA),
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Price: $35.47 -0.23%
Rating Summary:
15 Buy, 14 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
15 Buy, 14 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Dahlman Rose is maintaining its Buy rating on shares of Alcoa (NYSE: AA), but is lowering its price target from $19 to $17.50.
The firm notes that since the end of the second quarter, LME aluminum prices have fallen 15 percent. To go inline with the recent decline, the firm is lowering its 2012 aluminum price estimate from $1.25 to $1.10.
Dahlman believes that prices have finally reached the marginal cost of production.
The firm notes that buyers are currently not stocking up their inventories as fears of another recession may occur continue to linger. An analyst at the firm comments, "Such behavior should have a negative effect on raw material producers and processors until an eventual restocking takes place."
Dahlman Rose is reducing its Q3'11, 2011 and 2012 EPS estimates from $0.32, $1.30, and $1.60 to $0.24, $0.92, and $1.15.
"We remain positive on the fundamentals of aluminum and for Alcoa and believe prices have declined to levels that could curtail output in the industry, particularly in China, but we must compensate for the lower margins that should result from recent price declines," the analyst at Dahlman reported.
For more ratings news on Alcoa click here and for the rating history of Alcoa click here.
Shares of Alcoa closed at $8.90 yesterday.
The firm notes that since the end of the second quarter, LME aluminum prices have fallen 15 percent. To go inline with the recent decline, the firm is lowering its 2012 aluminum price estimate from $1.25 to $1.10.
Dahlman believes that prices have finally reached the marginal cost of production.
The firm notes that buyers are currently not stocking up their inventories as fears of another recession may occur continue to linger. An analyst at the firm comments, "Such behavior should have a negative effect on raw material producers and processors until an eventual restocking takes place."
Dahlman Rose is reducing its Q3'11, 2011 and 2012 EPS estimates from $0.32, $1.30, and $1.60 to $0.24, $0.92, and $1.15.
"We remain positive on the fundamentals of aluminum and for Alcoa and believe prices have declined to levels that could curtail output in the industry, particularly in China, but we must compensate for the lower margins that should result from recent price declines," the analyst at Dahlman reported.
For more ratings news on Alcoa click here and for the rating history of Alcoa click here.
Shares of Alcoa closed at $8.90 yesterday.
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