BMO Capital analyst Katja Jancic maintained a Hold rating on Alcoa yesterday and set a price target of $37.00.
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Katja Jancic’s rating is based on a combination of factors that reflect both the opportunities and challenges facing Alcoa. The company anticipates a positive market outlook with aluminum demand expected to grow in North America and Europe, where Alcoa holds a strong position. However, the limited supply growth in these regions could lead to regional deficits, which may support higher premiums.
Despite these positive market conditions, Alcoa’s financial strategy involves significant capital expenditures over the next five years, averaging $750-800 million annually. This elevated spending is primarily due to major projects, such as mine relocations in Australia, which could constrain short-term cash flow. Additionally, while Alcoa aims to maintain a strong balance sheet and has opportunities for asset monetization and operational optimization, the current valuation and tariff uncertainties in the aluminum market contribute to the Hold rating.
In another report released on October 23, J.P. Morgan also maintained a Hold rating on the stock with a $35.00 price target.