Alcoa Faces Financial Challenges and Operational Uncertainties, Warranting a Sell Rating

Bank of America Securities analyst Lawson Winder maintained a Sell rating on Alcoa today and set a price target of $27.00.

Lawson Winder’s rating is based on several financial and operational challenges facing Alcoa. The company’s projected Q3 2025 EBITDA is expected to fall short of consensus estimates, primarily due to adverse intersegment profit elimination and foreign exchange headwinds. Additionally, Alcoa’s free cash flow is anticipated to remain under pressure, with a significant outflow and an increase in net debt, which raises concerns about its financial health.
Moreover, ongoing uncertainties such as the Section 232 tariffs on Canadian shipments, slow progress at the loss-making San Ciprián operations, and permitting issues at its Western Australia bauxite mines contribute to a cautious outlook. While the aluminum segment is expected to show improvement, these gains are likely to be offset by negative intersegment eliminations, leading to a lower consolidated EBITDA and earnings per share. Consequently, these factors underpin Winder’s decision to maintain a Sell rating on Alcoa’s stock.