Alcoa (NYSE:AA) Shares Gap Down – Time to Sell?

by · The Markets Daily

Alcoa (NYSE:AA – Get Free Report)’s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $52.14, but opened at $48.85. Alcoa shares last traded at $47.2770, with a volume of 2,802,607 shares changing hands.

Alcoa News Summary

Here are the key news stories impacting Alcoa this week:

  • Positive Sentiment: Alcoa announced a major acquisition of South32’s bauxite, alumina, and aluminum assets for about $4.1 billion upfront, a move that expands its upstream footprint and could strengthen its long-term position in aluminum production. Article Title
  • Positive Sentiment: Citi reiterated a Buy rating on Alcoa and kept its $76 price target, saying the acquisition could drive upside if the integration goes well. Article Title
  • Neutral Sentiment: Media coverage highlighted Alcoa as one of the key stock movers before the open, but broader market weakness and a pullback in technology shares were also weighing on sentiment overall. Article Title
  • Negative Sentiment: Investors may be focused on execution and financing risks from the South32 deal, since the transaction is large and could add integration complexity even if it is strategically attractive.

Analysts Set New Price Targets

A number of equities analysts have weighed in on AA shares. Wells Fargo & Company reduced their price objective on Alcoa from $82.00 to $71.00 and set an “overweight” rating for the company in a research note on Thursday, June 25th. Royal Bank Of Canada set a $70.00 target price on Alcoa in a research note on Wednesday. UBS Group dropped their target price on Alcoa from $80.00 to $68.00 and set a “buy” rating on the stock in a report on Tuesday. BMO Capital Markets lifted their price target on Alcoa from $65.00 to $75.00 and gave the company a “market perform” rating in a research report on Thursday, April 9th. Finally, JPMorgan Chase & Co. boosted their price target on Alcoa from $68.00 to $70.00 and gave the company a “neutral” rating in a report on Thursday, April 9th. Six research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Hold” and a consensus price target of $67.82.

Read Our Latest Research Report on Alcoa

Alcoa Trading Down 8.9%

The company has a quick ratio of 0.88, a current ratio of 1.48 and a debt-to-equity ratio of 0.36. The company’s 50-day moving average is $66.01 and its 200 day moving average is $62.72. The company has a market cap of $12.53 billion, a price-to-earnings ratio of 12.04 and a beta of 1.56.

Alcoa (NYSE:AA – Get Free Report) last issued its quarterly earnings data on Thursday, April 16th. The industrial products company reported $1.40 earnings per share for the quarter, missing analysts’ consensus estimates of $1.60 by ($0.20). Alcoa had a return on equity of 12.57% and a net margin of 8.27%.The firm had revenue of $3.19 billion during the quarter, compared to analyst estimates of $3.35 billion. During the same quarter last year, the company posted $2.15 EPS. The company’s revenue was down 5.2% on a year-over-year basis. Research analysts predict that Alcoa will post 7.54 EPS for the current year.

Alcoa Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, June 5th. Shareholders of record on Tuesday, May 19th were given a dividend of $0.10 per share. The ex-dividend date was Tuesday, May 19th. This represents a $0.40 dividend on an annualized basis and a yield of 0.8%. Alcoa’s dividend payout ratio is currently 10.13%.

Institutional Trading of Alcoa

A number of institutional investors and hedge funds have recently made changes to their positions in AA. Mirabella Financial Services LLP raised its stake in shares of Alcoa by 12,233.1% during the 3rd quarter. Mirabella Financial Services LLP now owns 40,082,462 shares of the industrial products company’s stock worth $1,318,312,000 after buying an additional 39,757,462 shares during the period. Bank of New York Mellon Corp increased its holdings in Alcoa by 211.7% in the 4th quarter. Bank of New York Mellon Corp now owns 6,254,017 shares of the industrial products company’s stock worth $332,338,000 after acquiring an additional 4,247,559 shares in the last quarter. Castle Hook Partners LP purchased a new stake in Alcoa in the 4th quarter worth $210,874,000. Maple Rock Capital Partners Inc. purchased a new stake in Alcoa in the 4th quarter worth $173,412,000. Finally, AQR Capital Management LLC raised its position in Alcoa by 153.4% during the fourth quarter. AQR Capital Management LLC now owns 4,134,425 shares of the industrial products company’s stock worth $219,703,000 after acquiring an additional 2,503,132 shares during the period.

Alcoa Company Profile

(Get Free Report)

Alcoa Corporation is a global industry leader in the production and management of aluminum, offering an integrated value chain that spans bauxite mining, alumina refining, primary aluminum smelting and the fabrication of value-added products. The company’s operations are organized into segments that include raw material extraction, chemical processing and the manufacture of metal mill products and engineered solutions.

Alcoa’s product portfolio serves diverse end markets such as aerospace, automotive, packaging, construction, electrical and industrial applications.

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