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The Arconic Breakdown: Reading the Analysts

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Dec. 4 2020, Updated 10:43 a.m. ET

Analyst ratings

On November 1, 2016, Alcoa (AA) split into two new entities: Alcoa and Arconic (ARNC). The split completed a process that was initiated by the company in September 2015, but the actual seeds of the split were planted almost a decade ago, when Alcoa started to expand its value-add portfolio (CSTM) (MDY) (MID-INDEX).

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Consensus estimates

According to consensus estimates compiled by Thomson Reuters, Arconic has a mean one-year price target of $29.25, representing a 4.9% upside over its closing price on March 21, 2017. Of the six analysts surveyed by Thomson Reuters, three have recommended Arconic stock as a “buy” or equivalent, while one analyst has rated the stock as a “hold.” Two analysts have rated Arconic as a “sell.”

Analyst actions

On March 21, Deutsche Bank raised Arconic’s price target from $28 to $32. But there has been no other major analyst actions over the past month. Notably, however, Elliott Management, Arconic’s biggest shareholder, has waged a campaign to oust Klaus Kleinfeld, Arconic’s current chief executive officer.

Last month, Arconic sold 60% of its stake in Alcoa and raised ~$890 million. For more on this transaction, you can read Arconic Just Sold Its Majority Stake in Alcoa: What’s Next?

More recently, on March 16, Arconic announced that it had received $238 million in cash from the sale of Yadkin Hydroelectric Project. Arconic expects to receive another $5 million from this transaction in 2Q17.

In the next and final part of this series, we’ll see how analysts are rating Century Aluminum (CENX).

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