Market Overview

BMO Sees Challenging Times Ahead For Alcoa Due To Pricing Pressure


BMO Capital Markets issued a report on Alcoa Inc (NYSE: AA) calling the first quarter a good start for the company, but sees a challenging outlook ahead. BMO Capital Markets rates Alcoa as Market perform with a $15 price target.

Analysts David Gagliano and Matt Cartoceti wrote, "Results benefited from the early quarter strength in pricing, with the alumina and primary aluminum segments exceeding our estimates. This was offset by weaker-than-expected results in the mid-stream rolled-products segment, while the engineered solutions segment was in line."

Related Link: Alcoa Posts Upbeat Q1 Earnings, But Revenue Misses Views

BMO Capital Markets see three challenges ahead for Alcoa:

  1. Upstream pricing Pressure: Regional premiums are falling for Alcoa.
  2. Downstream Weakness: Quarterly results in the GRP segment fell short in the first quarter, with second quarter outlook also being below previous expectations.
  3. Valuation: Alcoa shares are near fully valued trading at 7.2x 2015 and 6.3x 2016 EBITDA estimates.

Shares of Alcoa recently traded at $12.99, down 4.9 percent.

Latest Ratings for AA

Jul 2019DowngradesOutperformNeutral
Apr 2019MaintainsOverweightOverweight
Apr 2019UpgradesHoldBuy

View More Analyst Ratings for AA
View the Latest Analyst Ratings

Posted-In: BMO Capital Markets DAvid Gagliano Matt CartocetiAnalyst Color Price Target Analyst Ratings


Related Articles (AA)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

U.S. Dollar Index Higher

Citigroup Says SanDisk's Numbers Will Improve