Zacks Research Downgrades Alcoa (NYSE:AA) to Strong Sell

Key Points

• Zacks Research downgraded Alcoa from “hold” to “strong sell,” adding to a more bearish tone around the stock.
• Several other firms also turned more cautious: JPMorgan, Morgan Stanley, and Bank of America lowered their price targets or ratings, while the overall consensus remains “Hold” with a $64.91 target.
• Alcoa recently posted weaker-than-expected Q1 results, missing EPS and revenue estimates and reporting a 5.2% year-over-year revenue decline, even as the stock was trading at $48.78 versus a much higher 52-week range.

Alcoa (NYSE:AA - Get Free Report) was downgraded by equities research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a report released on Wednesday,Zacks.com reports.

AA has been the topic of several other research reports. JPMorgan Chase & Co. dropped their price objective on shares of Alcoa from $70.00 to $55.00 and set a "neutral" rating on the stock in a research note on Thursday. Morgan Stanley reaffirmed an "equal weight" rating and set a $53.00 price objective (down from $79.00) on shares of Alcoa in a research report on Wednesday. Wells Fargo & Company lifted their target price on shares of Alcoa from $71.00 to $72.00 and gave the stock an "overweight" rating in a research report on Thursday. Royal Bank Of Canada set a $70.00 price target on shares of Alcoa in a research report on Wednesday, July 1st. Finally, Bank of America reduced their price objective on Alcoa from $57.00 to $51.00 and set an "underperform" rating for the company in a research note on Thursday. Five research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus price target of $64.91.

Alcoa Stock Performance

NYSE:AA opened at $48.78 on Wednesday. The firm's fifty day simple moving average is $63.55 and its 200 day simple moving average is $62.78. Alcoa has a twelve month low of $28.11 and a twelve month high of $84.38. The company has a quick ratio of 0.88, a current ratio of 1.48 and a debt-to-equity ratio of 0.36. The stock has a market cap of $12.87 billion, a P/E ratio of 12.35, a price-to-earnings-growth ratio of 0.70 and a beta of 1.63.

Alcoa (NYSE:AA - Get Free Report) last announced its earnings results on Thursday, April 16th. The industrial products company reported $1.40 earnings per share for the quarter, missing analysts' consensus estimates of $1.60 by ($0.20). The company had revenue of $3.19 billion for the quarter, compared to the consensus estimate of $3.35 billion. Alcoa had a net margin of 8.27% and a return on equity of 12.57%. The company's revenue for the quarter was down 5.2% on a year-over-year basis. During the same period in the previous year, the firm posted $2.15 EPS. As a group, research analysts predict that Alcoa will post 8.07 EPS for the current year.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of AA. Basepoint Wealth LLC bought a new position in Alcoa during the fourth quarter valued at $25,000. Advisory Services Network LLC purchased a new position in shares of Alcoa during the third quarter valued at approximately $27,000. Raleigh Capital Management Inc. grew its position in Alcoa by 52,500.0% in the 4th quarter. Raleigh Capital Management Inc. now owns 526 shares of the industrial products company's stock valued at $28,000 after acquiring an additional 525 shares during the last quarter. CoreCap Advisors LLC increased its stake in Alcoa by 74.1% in the 4th quarter. CoreCap Advisors LLC now owns 557 shares of the industrial products company's stock worth $30,000 after buying an additional 237 shares during the period. Finally, Caitong International Asset Management Co. Ltd increased its position in shares of Alcoa by 5,281.8% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 592 shares of the industrial products company's stock worth $31,000 after acquiring an additional 581 shares during the period.

More Alcoa News

Here are the key news stories impacting Alcoa this week:

• Positive Sentiment: Wells Fargo raised its price target on Alcoa to $72 from $71 and kept an overweight rating, signaling one analyst still sees meaningful upside. Alcoa had its price target raised by Wells Fargo & Company
• Neutral Sentiment: Alcoa was added to the Zacks Rank #5 “Strong Sell” list, which may reinforce bearish sentiment but is a model-based signal rather than a company-specific event. New Strong Sell Stocks for July 9th
• Neutral Sentiment: Benzinga highlighted Alcoa as one of several “oversold” materials stocks with RSI near or below 30, which could attract bargain hunters if investors look for a rebound. New Strong Sell Stocks for July 9th
• Negative Sentiment: Analyst sentiment has deteriorated as Morgan Stanley, JPMorgan, and Bank of America all trimmed their valuation views, citing weaker aluminum fundamentals and a less favorable supply outlook. Morgan Stanley upgrades Ivanhoe Mines, cuts Alcoa and Vale on metals outlook

About Alcoa

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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