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How Do Analysts Rate Alcoa after Its 4Q16 Earnings Release?

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Analysts’ ratings

Alcoa (AA) released its 4Q16 earnings on January 24, 2017. Generally, analysts revise their target prices and recommendations after a company’s earnings release to reflect the earnings and the outlook provided by the company’s management.

In this article, we’ll take a look at analysts’ ratings for Alcoa after its 4Q16 earnings release.

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Consensus estimates

According to consensus estimates compiled by Thomson Reuters, Alcoa has a mean one-year price target of $35.06, representing a 5.1% downside over its closing price on February 3, 2017. In contrast, Alcoa carried a one-year price target of $33.13 on January 23, one day before its earnings release.

Of the 12 analysts surveyed by Thomson Reuters, five recommended Alcoa stock as a “buy” or equivalent, while only one recommended a “sell” or equivalent on the stock. Of these analysts, 50% have recommended a “hold” on the stock.

Looking at other aluminum producers (RIO) (XLB), all five analysts polled by Thomson Reuters rated Century Aluminum (CENX) as a “hold.” Norsk Hydro (NHYDY) received a “buy” or equivalent rating from 35% of analysts, and 22% of analysts surveyed by Thomson Reuters rated Norsk Hydro as a “sell” or equivalent.

Recommendation changes

Some analysts upgraded Alcoa following its 4Q16 earnings release. On February 2, 2017, J.P. Morgan upgraded Alcoa from “neutral” to “overweight” while raising its target price from $29.00 to $46.00.

On January 30, 2017, Morgan Stanley raised Alcoa’s price target from $37.00 to $40.00. Deutsche Bank also raised Alcoa’s price target from $30.00 to $32.50 after its 4Q16 earnings release.

In the coming parts of this series, we’ll explore Alcoa’s 2017 guidance. Let’s begin by analyzing Alcoa’s 2016 production profile.

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