How Wall Street Views Alcoa before Its Second-Quarter Earnings

The word on Wall Street

Alcoa (AA) is scheduled to release its second-quarter earnings on July 18. In this article, we’ll see how analysts are rating the stock ahead of its second-quarter earnings.

How Wall Street Views Alcoa before Its Second-Quarter Earnings

Alcoa has received “strong buy” ratings from three analysts, while seven have given it “buy” or equivalent ratings. The remaining five analysts polled by Thomson Reuters on July 10 have rated Alcoa as a “hold.” Alcoa’s mean consensus price target of $65.31 represents a 36.4% upside over its July 10 closing price. In comparison, Century Aluminum’s (CENX) target price implies a potential upside of 52.8%.

Recent action

Recently, BMO noted that Alcoa and Rio Tinto (RIO) are among its top picks in the metals and mining space. Last month, B. Riley Financial initiated coverage on Alcoa with a “hold” rating and a target price of $47. In comparison, the brokerage is bullish on Century Aluminum and started its coverage of the stock with a “buy” rating and a target price of $27.

Outlook

After Alcoa’s second-quarter earnings release, analysts could take a fresh look at its stock. The company’s 2018 guidance will likely be a primary focus of the markets given the recent slide in aluminum prices. Later this year, we could also see the alumina to aluminum ratio fall closer to its historical average.

Meanwhile, despite the expected correction in alumina prices and the recent fall in aluminum prices, Alcoa’s valuation seems to have factored in the known negatives. Read A Look at Alcoa’s Valuation to see how markets are valuing Alcoa.

You can also read 5 Reasons to Love Alcoa’s Stock…and 3 Not To for a detailed analysis of Alcoa’s bullish and bearish drivers.