Deutsche Bank Maintains Hold, $10 Target on Alcoa

Deutsche Bank reiterates its Hold rating and $10 target price on Alcoa (NYSE: AA) as the company's posted negative 4Q11 EPS was in line with Bloomberg but below Deutsche Bank's estimate of a positive one cent figure.

Deutsche Bank says, "Reported EPS of -18c was impacted by a net 15c, $159m (~60% non-cash) restructuring charge on plant closures off-set partly by derivative gains and land sale proceeds. Cash on hand of $1.9bn in-line with DBe via ~$800m working capital gain. Core EBITDA of $445 missed DBe of $545 (-18%) and is annualizing to $1.8bn, which compares to 2012E capex of $1.7bn, $650m pension contribution and $500m of interest expense. Alcoa plans to be cash flow neutral (or better) in 2012 by cutting costs $800m (‐4%) and $100m W/C gains, but high cash hoard helps."

AA closed at $9.43 per share on Monday.