What to Expect When Alcoa (AA) Reports Earnings Results Wednesday

Because Alcoa kicks off the earnings season, some investors see the company as a leading indicator of what direction the market is going as it moves in to earnings season. As per the latest information, the brokerage house lowers the price target to $12 per share from a prior target of $13. While it appears consensus expectations for 2Q have re-set appropriately lower, the 3Q outlook is unlikely to provide a positive catalyst for Alcoa shares… The company has received recommendation from many analysts. The reported EPS of $0.28 was $0.02 away from what Wall Street analysts had expected. Of those eighteen, nine have a Buy rating, eight have a Hold rating and one has a Sell rating. With the closure of the Poços de Caldas smelter, the company’s smelting capacity will be reduced further to 3.4 MTPY.

Shares of Alcoa (NYSE:AA) opened at 11.03 on Tuesday. Given the strong start to Chinese production in the first five months of the year, analysts at Deutsche Bank still forecast a modestly over-supplied market for the foreseeable future.

Alcoa Inc. has lost 4.06% in the last five trading days and dropped 11.97% in the last 4 weeks. It has increased by 23% from the same period of last month. (NYSE:AA) which led to swings in the share price. Prices may trade closer to $1,500 a ton by the end of the year, the lowest since 2009, amid record inventories worldwide, according to Colin Hamilton, London-based head of commodities research at Macquarie. The 1-year stock price history is in the range of $10.92 – $17.75.

Morgan Stanley has a Buy rating and a $16 price target. The transaction was disclosed in a legal filing with the SEC, which is available at this link. This time around, the options market is expecting a 5.4% swing – based on AA’s near-term at-the-money straddle – and considering the weekly 7/10 11-strike call is pricing in higher implied volatility than the put (76.2% vs. 73.7%), it appears the action is expected to resolve itself to the upside. Alcoa’s products are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications.

Alcoa Inc. (Alcoa) is engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined, through its participation in technology, mining, refining, smelting, fabricating, and recycling. Alcoa’s operations consist of four worldwide reportable segments: Alumina, Primary Metals, Flat-Rolled Products, and Engineered Products and Solutions.