Analyst Alexander Hacking from Citi maintained a Buy rating on Alcoa and keeping the price target at $42.00.
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Alexander Hacking has given his Buy rating due to a combination of factors that reflect Alcoa’s strategic decisions and potential for future growth. The permanent closure of the Kwinana alumina refinery is a significant move, as it was already non-operational and its closure will help Alcoa avoid further operating losses. Although the closure involves cash costs, Alcoa anticipates recovering some expenses through site redevelopment, which is seen as having substantial potential.
Moreover, the closure is expected to enhance focus on Alcoa’s bauxite permits in Western Australia, addressing previous challenges with bauxite grade. This strategic decision is viewed as economically sensible and aligns with Alcoa’s long-term operational goals. Additionally, the expected share price return of 24.1% further supports the Buy rating, indicating a positive outlook for Alcoa’s stock performance.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $38.00 price target.