Alcoa (NYSE:AA) Trading 5.8% Higher - Still a Buy?

Key Points

• Alcoa shares rose 5.8% on Wednesday, trading as high as $46.73 after closing at $44.35, though volume was well below average.
• Analyst sentiment is mixed: the consensus rating is now “Hold,” with an average price target of $61.09, and recent firms have trimmed targets even as some still rate the stock a buy.
• Recent earnings missed expectations, with Alcoa posting $2.12 EPS versus the $2.25 estimate and revenue of $3.97 billion versus $3.99 billion expected, despite year-over-year improvement in profitability.

Alcoa (NYSE:AA - Get Free Report)'s stock price rose 5.8% during trading on Wednesday . The stock traded as high as $46.73 and last traded at $46.9180. Approximately 1,410,370 shares traded hands during trading, a decline of 78% from the average daily volume of 6,434,916 shares. The stock had previously closed at $44.35.

Wall Street Analysts Forecast Growth

Several equities analysts have recently issued reports on the company. Wall Street Zen cut Alcoa from a "buy" rating to a "hold" rating in a research report on Saturday, May 9th. Weiss Ratings upgraded Alcoa from a "hold (c)" rating to a "hold (c+)" rating in a report on Wednesday, June 17th. B. Riley Financial decreased their target price on Alcoa from $92.00 to $80.00 and set a "buy" rating for the company in a research note on Tuesday, July 7th. Royal Bank Of Canada set a $70.00 target price on Alcoa in a report on Wednesday, July 1st. Finally, BMO Capital Markets cut their price target on shares of Alcoa from $60.00 to $55.00 and set a "market perform" rating for the company in a report on Friday, July 17th. Six research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and an average target price of $61.09.

Alcoa Stock Performance

The company has a quick ratio of 0.92, a current ratio of 1.53 and a debt-to-equity ratio of 0.30. The stock has a market cap of $12.24 billion, a price-to-earnings ratio of 9.54, a price-to-earnings-growth ratio of 0.48 and a beta of 1.63. The company's 50-day simple moving average is $60.80 and its 200-day simple moving average is $62.38.

Alcoa (NYSE:AA - Get Free Report) last announced its quarterly earnings data on Thursday, July 16th. The industrial products company reported $2.12 EPS for the quarter, missing analysts' consensus estimates of $2.25 by ($0.13). The company had revenue of $3.97 billion for the quarter, compared to analyst estimates of $3.99 billion. Alcoa had a net margin of 9.48% and a return on equity of 18.90%. During the same quarter last year, the company posted $0.39 EPS. Analysts predict that Alcoa will post 6.72 EPS for the current fiscal year.

Alcoa Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Friday, June 5th. Stockholders of record on Tuesday, May 19th were given a dividend of $0.10 per share. The ex-dividend date of this dividend was Tuesday, May 19th. This represents a $0.40 dividend on an annualized basis and a dividend yield of 0.9%. Alcoa's payout ratio is 8.23%.

Hedge Funds Weigh In On Alcoa

Hedge funds and other institutional investors have recently modified their holdings of the stock. Nordea Investment Management AB boosted its stake in Alcoa by 187.7% in the 4th quarter. Nordea Investment Management AB now owns 408,624 shares of the industrial products company's stock worth $21,902,000 after purchasing an additional 266,574 shares during the period. Moran Wealth Management LLC acquired a new stake in Alcoa during the 4th quarter valued at $2,631,000. Merit Financial Group LLC raised its stake in Alcoa by 114.2% during the 4th quarter. Merit Financial Group LLC now owns 28,945 shares of the industrial products company's stock valued at $1,538,000 after purchasing an additional 15,432 shares during the period. Drummond Knight Asset Management Pty Ltd lifted its holdings in shares of Alcoa by 14.1% in the fourth quarter. Drummond Knight Asset Management Pty Ltd now owns 1,060,523 shares of the industrial products company's stock valued at $56,356,000 after purchasing an additional 130,915 shares in the last quarter. Finally, Evergreen Capital Management LLC purchased a new stake in shares of Alcoa in the fourth quarter valued at $1,399,000.

Alcoa Company Profile

Alcoa Corporation is a global industry leader in the production and management of aluminum, offering an integrated value chain that spans bauxite mining, alumina refining, primary aluminum smelting and the fabrication of value-added products. The company's operations are organized into segments that include raw material extraction, chemical processing and the manufacture of metal mill products and engineered solutions.

Alcoa's product portfolio serves diverse end markets such as aerospace, automotive, packaging, construction, electrical and industrial applications.

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