Alcoa Inc. (NYSE: AA) is scheduled to report its second-quarter financial results after the markets close Wednesday. The consensus estimates from Thomson Reuters call for $0.23 in earnings per share (EPS) on $5.79 billion in revenue. In the same period of last year the company posted EPS of $0.18 and revenue of $5.84 billion.
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Falling aluminum prices over the past year have been absolutely destructive to Alcoa stock. Shares have dropped about 30% year to date.
The company is in desperate need of a turnaround. Only recently have shares crept to a new low on the year, after exploding in 2014. At this point Alcoa is trying new things to boost shares and broaden its business. The newest thing the company is looking into is 3D printing jet engine parts.
However, the miners are all struggling with falling prices for the commodity, and the continuing high export levels from China are getting the blame. Other factors affecting the price are weak demand and abundant supply from Noranda, Alcoa and the rest. Even Rusal, the Russian aluminum colossus, is feeling the effect of Chinese exports.
Because Alcoa kicks off the earnings season, some investors see the company as a leading indicator of what direction the market is going as it moves in to earnings season. However, a majority would disagree and look for other stocks that are more highly correlated with the broad markets.
Ahead of earnings a few analysts weighed in on this aluminum giant:
- Sterne Agee CRT reiterated a Neutral rating with a $12 price target.
- Deutsche Bank has a Buy rating but lowered its price target to $16 from $19.
- Macquarie has a Neutral rating and lowered its price target to $12 from $13.
- Stifel reiterated a Buy rating but lowered its price target to $18 from $19.
- Morgan Stanley has a Buy rating and a $16 price target.
Shares of Alcoa fell about 4% Tuesday morning to a new 52-week low of $10.58. The stock has a consensus analyst price target of $15.83 and a 52-week high of $17.75.
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