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JPMorgan says recent news could prompt an entry point in Alcoa shares

Published 12/14/2023, 01:32 PM
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JPMorgan analysts raised the firm's stock price target for Alcoa (NYSE:AA) to $30 from $26 in a note Thursday, maintaining a Neutral rating on the stock. However, the firm noted that recent news could prompt an entry point.

"We see downside to 4Q consensus estimates on weaker pricing, but news late last night that the local government in Western Australia (WA) will allow for the continuation of bauxite mining provides much-needed clarity on a path forward," the analysts said.

The investment bank feels this could remove a key overhang on shares but notes that poor bauxite grades should remain a drag through 2027. In addition, JPMorgan believes tough decisions remain around the company's San Ciprian complex and loss-making Kwinana refinery.

"Ultimately, this could prove a solid entry point ahead of signs of improving fundamentals, likely in 2H24 at the earliest," the analysts noted.

The analysts, who released the note before the open on Thursday, said they expected shares to react positively during the session, which they have. AA's share price is up more than 13% on the day, trading above the $29 mark.

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