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Alcoa May Beat, But Don't Expect a Pop: Analyst
Edited by : AL CIRCLE
1 min read
Alcoa’s quarterly results may beat Wall Street expectations, but don’t expect a positive market reaction, according to David Silver, equity research analyst at Wall Street Strategies.
“Following last quarter’s earnings beat, [Alcoa’s] stock [AA 15.91 -0.47 (-2.87%) ] was down in the after-market trading because of guidance,” Silver said in an interview on CNBC. “They beat on the topline and they beat on the bottomline just by a penny, but expectations were not there and I expect to see something similar for this quarter.”
Silver downgraded the aluminum producer’s rating to “hold” from “buy” on Apr. 12 and shares have declined almost 7 percent since. He has a $17 price target on the stock.
Silver sees the company earning 35 cents compared to a 32 cents a share consensus estimate from Thomson Reuters.
“It’s not going to be a huge beat but it’s all about expectations,” he added.
Silver also noted that aluminum prices are up more than 5 percent compared to where they were in the previous quarter.
“That’s going to help [Alcoa's] topline and that’s going to help offset the increase in costs for electricity, coal and energy so it’s going to allow the bottomline to beat.”
“Following last quarter’s earnings beat, [Alcoa’s] stock [AA 15.91 -0.47 (-2.87%) ] was down in the after-market trading because of guidance,” Silver said in an interview on CNBC. “They beat on the topline and they beat on the bottomline just by a penny, but expectations were not there and I expect to see something similar for this quarter.”
Silver downgraded the aluminum producer’s rating to “hold” from “buy” on Apr. 12 and shares have declined almost 7 percent since. He has a $17 price target on the stock.
Silver sees the company earning 35 cents compared to a 32 cents a share consensus estimate from Thomson Reuters.
“It’s not going to be a huge beat but it’s all about expectations,” he added.
Silver also noted that aluminum prices are up more than 5 percent compared to where they were in the previous quarter.
“That’s going to help [Alcoa's] topline and that’s going to help offset the increase in costs for electricity, coal and energy so it’s going to allow the bottomline to beat.”
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