BMO Capital keeps a Market Perform rating and $75 price target on Alcoa (AA) after its “explainable” Q1 earnings miss. The firm notes no changes to 2026 shipment targets and a material increase in aluminum and regional premium prices that are expected to drive a significant increase in Q2 earnings. BMO further notes that some raw material costs are moving higher, but spot energy exposure for Alcoa is negligible. While a prolonged war in the Middle East could result in demand destruction, asset sales are progressing and capital allocation optionality should increase with improving free cash flow generation for the company, the analyst tells investors in a research note.
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