Nomura Securities analyst Curt Woodworth reiterated a Neutral rating and $8 price target on Alcoa (NYSE: AA) following Q1 results, saying Premia at risk as well as the premium valuation.

Woodworth said, "A combination of weak ali market fundamentals and strong downstream recovery has effectively transformed Alcoa into a vertically-integrated materials processing company compared to a primary mining and smelting company with downstream capabilities. The shift towards greater dependence on the downstream assets, which has been partly driven by ali prices recently reaching a five year low, has been positively recognized by the market, with investors awarding AA a valuation multiple closer to its aerospace industrial peers relative to its highly cyclical and lower margin base metal mining peers."

The analyst also notes that the automotive impact is significant but not a game changer. "We believe the downstream automotive opportunity for Alcoa is ~$70-100mm/annum of incremental EBITDA by 2015 (at 25-30% EBITDA margin), which is meaningful to GRP but not a game changer for the company," he said.

The firm bumped FY 2014 EPS from $0.14 to $0.35 and FY 2015 EPS from $0.31 to $0.42.

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Shares of Alcoa closed at $12.53 yesterday.