UPDATE: J.P. Morgan Downgrades Alcoa to Neutral, Lowers PT on Lower Aluminum Price Forecasts

In a report published Wednesday, J.P. Morgan analyst Michael F. Gambardella downgraded the rating on Alcoa AA from Overweight to Neutral, and lowered the price target from $12.00 to $9.00. In the report, J.P. Morgan noted, “We are downgrading Alcoa to Neutral from Overweight, establishing a $9 December 2014 price target, and reducing our estimates to reflect our metal strategists' lower aluminum price forecasts. Alcoa has clearly taken steps to lower its costs in its upstream segments (Alumina and Primary Metals) and to grow its downstream businesses (Global Rolled Products and Engineered Products & Solutions). However, we believe these efforts will be largely overshadowed by a persistently weak aluminum price environment, which should weigh on AA's earnings and stock price. Additionally, outside of aluminum prices materially increasing or investor sentiment on the sector significantly improving, we see few catalysts for Alcoa's stock in the near term.” Alcoa closed on Tuesday at $7.80.