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What to do with the securities of Alcoa, Bank of America and Morgan Stanley? Here are some recommendations from analysts likely to move prices in the near future. Note: the author may have a totally different opinion from that expressed.
Alcoa (AA, US $ 56.00): Share price jumps 15% on quarterly results
The aluminum producer who used to be the first major company to report quarterly results only did so last Thursday, but those boosted the share price by 15%.
However, David Gagliano, analyst at BMO Capital Markets, believes the stock is now fully valued, given the outlook for the aluminum sector following the material price surge, and that the catalysts that can propel the title above are currently limited.
Alcoa certainly continues to benefit from exceptionally strong prices for aluminum, notes the analyst. This enabled it to achieve earnings before interest, taxes, depreciation and amortization (EBITDA) of US $ 728 million, slightly above the analyst consensus forecast of US $ 723 million.
The aluminum giant will face additional costs of around $ 240 million in the next quarter related to its energy and raw material supply. But that doesn’t stop the analyst from raising his profit forecast for the next quarter from US $ 927 million to US $ 1.062 billion (US $ billion) because of the lingering effects of rising prices.
However, Alcoa’s longer-term outlook is intimately tied to the evolution of aluminum prices, and BMO’s commodity research team is not overly bullish on the price. aluminum next year. She expects it to drop from its current price of US $ 1.43 to US $ 1.04.
Consequently, the analyst predicts that EBITDA will be limited to 2.538 billion in 2022 after reaching 2.929 billion in 2021. Its recommendation is of “performance equal to the market”, and its target price is US $ 57, which is substantially the same. current course.
Alcoa will pay its shareholders a dividend of US $ 0.10 per share, or an annualized return of approximately 0.8% at the current price. It also announced a new 500 million share buyback program, bringing it to 650 million, or about 7% of the shares outstanding.
Next page – Bank of America (BAC, US $ 46.37): well positioned to benefit from the economic recovery
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