BofA cuts target for Aluminium Corporation of China amidst strategic shift

BofA Securities has brought a revised stance on Aluminium Corporation of China (NYSE: ACH) by reducing its price target from USD 4.20 to USD 2.50 while maintaining an Underperform status. The new target, which has been set, only offers a small margin above the current share price of USD 2.32, highlighting the stock’s sharp decline over the past year. ACH shares have plunged 82 per cent and are trading near a 52-week low of USD 2.30.

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The brokerage attributed the downgrade to ongoing uncertainties in the company’s short-term performance. At present, ACH is dealing with challenges that seem short-term, though significant, such as the loss of the Kaiser contract. InvestingPro forecasts a 74 per cent deflation in revenue for FY2025, signalling a difficult period ahead.

However, BofA believes the recent strategic shifts can improve ACH’s long-term prospects. The company has divested its Products & Healthcare Services (P&HS) unit, which allows it to operate as a more focused Patient Direct business. The brokerage expects this streamlined approach to deliver clearer economics and support higher growth and margin potential in the years to come.

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Based on the 8x CY26 EV/EBITDA adjusted for capital expenditure, the recent price target is set, which is already higher than the previous 6x. There is a significant change in the debt and cash following the divestiture, and the same applies to a 1–2 turn discount relative to the closest pure-play competitor. However, ACH may still struggle with undervaluation, which might point towards a current EV/EBITDA of 4.72x and a FAIR Financial Health rating, despite these near- and long-term challenges.

Meanwhile, the company has completed a notable corporate transition. Accendra Health, Inc. now trades on the New York Stock Exchange under the ticker “ACH”, following the sale of its former Products & Healthcare Services division, including the Owens & Minor brand, on 31 December. 

Precisely these recent shifts define a notable strategic reset for Accendra Health, which has now positioned the company as a more focused operator and is leveraging this change to attract investors monitoring its progress in the months ahead.

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