This Alcoa Analyst Lowers Forecasts After Q4 Miss, Plus 'Overall, A Softer-Than-Expected 2024 Start'

Shares of Alcoa Corp AA tanked in early trading on Thursday, after the company reported mixed results for its fourth quarter.

The company’s adjusted EBITDA miss was mainly due to “other corporate items,” while its total segment EBITDA of $172 million came in “slightly above our estimate,” according to BMO Capital Markets.

The Alcoa Analyst: Katja Jancic maintained a Market Perform rating for Alcoa while reducing the price target from $30 to $29.

The Alcoa Thesis: Although the company announced a disappointing outlook for the first quarter, it provided “a list of near-term factors/actions” that could drive around $645 million in annualized EBITDA improvement in 2024-25, “with further upside potential driven by any type of San Ciprián resolution, in our view,” Jancic said in the note.

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“Overall, a softer-than-expected 2024 start, but increased clarity on near-term actions driving potential improvements not dependent on the market, is a positive in our opinion,” he added.

The analyst reduced the EBITDA estimates for the first quarter and 2024 from $235 million to $150 million and from $1,137 million to $1,235 million, respectively. He also lowered the earnings estimates for the first quarter and 2024 from 2 cents per share to -30 cents per share and from $1.05 per share to 47 cents per share, respectively.

AA Price Action: Shares of Alcoa had declined by 1.29% to $26.83 at the time of publication Thursday.

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