Alcoa (NYSE:AA) Shares Gap Down - Time to Sell?

Key Points

• Alcoa shares gapped down from $40.14 to $38.48 prior to trading on Friday, with the last recorded trading price at $39.04.
• Brokerages have mixed ratings on Alcoa, with a consensus rating of "Hold" and an average target price of $42.13, while Wells Fargo set an "overweight" rating and a target price of $40.00.
• Alcoa recently reported earnings, with an EPS of ($0.02) for the quarter, surpassing estimates and reflecting a revenue increase of 3.1% compared to the same quarter last year.

Alcoa (NYSE:AA - Get Free Report) shares gapped down prior to trading on Friday . The stock had previously closed at $40.14, but opened at $38.48. Alcoa shares last traded at $39.04, with a volume of 1,893,167 shares.

Wall Street Analysts Forecast Growth

Several brokerages recently weighed in on AA. Weiss Ratings reissued a "hold (c-)" rating on shares of Alcoa in a report on Friday. Wells Fargo & Company initiated coverage on Alcoa in a report on Tuesday, October 7th. They set an "overweight" rating and a $40.00 target price for the company. Bank of America lifted their target price on Alcoa from $26.00 to $27.00 and gave the company an "underperform" rating in a report on Thursday, July 17th. UBS Group lifted their target price on Alcoa from $31.00 to $34.00 and gave the company a "neutral" rating in a report on Friday, September 19th. Finally, BMO Capital Markets lifted their target price on Alcoa from $35.00 to $37.00 and gave the company a "market perform" rating in a report on Thursday. Seven investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, Alcoa currently has a consensus rating of "Hold" and an average target price of $42.13.

Alcoa Stock Performance

The company has a market capitalization of $10.18 billion, a PE ratio of 9.08, a PEG ratio of 0.23 and a beta of 2.20. The company has a 50 day moving average of $33.29 and a two-hundred day moving average of $29.89. The company has a debt-to-equity ratio of 0.41, a current ratio of 1.65 and a quick ratio of 0.97.

Alcoa (NYSE:AA - Get Free Report) last released its earnings results on Wednesday, October 22nd. The industrial products company reported ($0.02) EPS for the quarter, topping the consensus estimate of ($0.15) by $0.13. The business had revenue of $3 billion for the quarter, compared to the consensus estimate of $3.03 billion. Alcoa had a return on equity of 16.31% and a net margin of 8.91%.The company's revenue for the quarter was up 3.1% compared to the same quarter last year. During the same period in the previous year, the company posted $0.57 earnings per share. As a group, equities research analysts predict that Alcoa will post 4.43 earnings per share for the current year.

Alcoa Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, November 21st. Stockholders of record on Tuesday, November 4th will be given a dividend of $0.10 per share. The ex-dividend date of this dividend is Tuesday, November 4th. This represents a $0.40 annualized dividend and a dividend yield of 1.0%. Alcoa's dividend payout ratio is presently 9.24%.

Institutional Trading of Alcoa

Several institutional investors have recently made changes to their positions in AA. Norges Bank purchased a new position in Alcoa during the 2nd quarter valued at approximately $97,933,000. L1 Capital Pty Ltd lifted its stake in shares of Alcoa by 178.8% in the 2nd quarter. L1 Capital Pty Ltd now owns 4,814,342 shares of the industrial products company's stock valued at $142,071,000 after purchasing an additional 3,087,298 shares during the last quarter. Dimensional Fund Advisors LP lifted its stake in shares of Alcoa by 33.9% in the 1st quarter. Dimensional Fund Advisors LP now owns 6,803,086 shares of the industrial products company's stock valued at $207,490,000 after purchasing an additional 1,721,222 shares during the last quarter. Drummond Knight Asset Management Pty Ltd bought a new stake in shares of Alcoa in the 2nd quarter valued at approximately $44,893,000. Finally, Assenagon Asset Management S.A. bought a new stake in shares of Alcoa in the 2nd quarter valued at approximately $44,151,000. Hedge funds and other institutional investors own 82.39% of the company's stock.

Alcoa Company Profile

Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through two segments, Alumina and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses.

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