Aloca Soars 8% On Earnings, Analysts’ Opinion Roundup
Shares of Alcoa (AA) were soaring 8% in recent trading following the company’s robust first-quarter earnings beat. Here is what analysts are saying this morning about the report: Morgan Stanley analysts reiterated an Overweight rating on the stock: “Sustainability of 1Q12 performance will increase investor confidence in normalized earnings power, which we estimate at $1.25. [...]

Shares of Alcoa (AA) were soaring 8% in recent trading following the company’s robust first-quarter earnings beat.

Here is what analysts are saying this morning about the report:

Morgan Stanley analysts reiterated an Overweight rating on the stock: “Sustainability of 1Q12 performance will increase investor confidence in normalized earnings power, which we estimate at $1.25. We raise our 2012e EPS to $0.75 from $0.65.”

Dahlman Rose analyst Anthony Rizzuto, Jr. maintained his Buy rating: “We are encouraged by these results, but are remaining somewhat cautious with our estimates until we see a sustained follow through in performance. If productivity and operational gains can be maintained, we believe the market will begin to look more favorably at the shares. We are increasing our full year EPS and EBITDA estimates to $0.50 and $2.9 Bn from $0.40 and $2.6 Bn, respectively. We are initiating 2Q12 EPS and EBITDA estimates of $0.07 and $645 MM.”

BMO Capital Markets analyst Tony Robson reiterated his Market Perform rating: “The earnings beat is positive considering the current negative sentiment surrounding the aluminum sector in general. BMO Research notes that though operating margins in the downstream divisions improved on better-than-expected productivity gains, the upstream alumina and aluminum segments continue to face severe energy and input cost pressures, and relatively weak realized prices. The company expects modest aluminum demand growth in North America in 2012, zero growth from Europe and a small deficit of 0.5Mt this year. Alumina, on the other hand, is now expected to be in surplus.”

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