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



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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