Alcoa Faces Financial Challenges Amid Tariffs and Market Uncertainties, Leading to Reiterated Sell Rating

Lawson Winder, an analyst from Bank of America Securities, reiterated the Sell rating on Alcoa (AA – Research Report). The associated price target was lowered to $25.00.

Lawson Winder has given his Sell rating due to a combination of factors impacting Alcoa’s financial outlook. Despite Alcoa’s strategic moves to bolster its business, such as the sale of its Ma’aden joint venture interest and the acquisition of Alumina Ltd, the company faces significant challenges. These include the adverse effects of tariffs, declining aluminum and alumina prices, and the costly restart of the San Ciprián smelter in Spain.
Furthermore, Alcoa’s guidance for 2025 reflects ongoing uncertainties in the market, particularly concerning aluminum prices and demand, which are influenced by tariffs. Although there is a projected benefit from lower alumina costs, these are partially offset by the expenses related to the San Ciprián smelter. The updated earnings estimates for 2025 suggest a reduction in expected EBITDA, leading to a lowered price objective of $25 per share. These factors collectively underpin the reiterated Underperform rating.