Alcoa Earnings Preview: Crowd & Experts Have Bullish –Yet Declining- Expectations

Alcoa Inc AA is scheduled to report its second quarter financial results on Wednesday afternoon, after the market closes. And, according to Estimize, the company is expected to deliver a year-over-year earnings growth rate between 27 percent and 45 percent.

In the second quarter of 2014, earnings came in at $0.18 per share, and revenue at $5.836 billion. For the current quarter, the Street is modeling consensus earnings of $0.23 per share on revenue of $5.82 billion, while the crowd is projecting consensus earnings of $0.26 per share on sales of $5.897 billion.

Moreover, it should be noted from the chart above that Alcoa has a history of surpassing estimates. So, a beat could be expected this quarter.

A second chart, featured above, illustrates the evolution of sentiment over time. As it can be seen, both the Street and the crowd have become less optimistic on results as earnings loomed and now stand at their lowest. However, overall sentiment is still quite bullish.

What Analysts Think

In a recent report, Morgan Stanley analyst Paretosh Misra lowered his price target on shares of Alcoa to $16, after a downward revision in the 2015-2017 EBITDA estimates.

Related Link: Alcoa Price Target Cut To $16 By Morgan Stanley: Here's Why

"Downward revisions to consensus estimates and depressed metal pricing makes near term rebound in shares challenging but we see drivers in place for a 2H recovery in shares," Misra explained.

The firm maintains an Overweight rating on the stock.