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UPDATE: Deutsche Bank Downgrades Alcoa on Deteriorating Aluminum Business Outlook

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In a report published Wednesday, Deutsche Bank analyst Jorge Beristain downgraded the rating on Alcoa (NYSE: AA) from Hold to Sell, and lowered the price target from $9.00 to $5.50.

In the report, Deutsche Bank noted, “We downgrade Alcoa to Sell from Hold on the back of a deteriorating outlook for its Primary aluminum business. Our new Price Target of $5.5/share (from $9 previously) implies 32% downside from current levels. Our downgrade is primarily driven by DB's lower medium-term aluminum price outlook (12-13% lower in 2014-15 to $0.82 and $0.88/lb, respectively), which cuts 2014E and 2015E EPS by over half. In this report we postulate that Alcoa should consider spinning off Primary to reduce its negative drag and maximize equity value.”

Alcoa closed on Tuesday at $8.17.

Latest Ratings for AA

DateFirmActionFromTo
Sep 2014BernsteinInitiates Coverage onOutperform
Jul 2014JP MorganMaintainsOverweight
Jul 2014Morgan StanleyUpgradesEqual-weightOverweight

View More Analyst Ratings for AA
View the Latest Analyst Ratings

Posted-In: Deutsche Bank Jorge BeristainAnalyst Color Downgrades Analyst Ratings

 

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