Alcoa (AA) and Kaiser Aluminum (KALU) Downgraded by Wells Fargo, Price Targets Adjusted
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Downgrade Action: Wells Fargo downgraded Alcoa (AA) and Kaiser Aluminum (KALU) from Overweight to Equal Weight, citing concerns that investors may be underestimating substitution risks for aluminum and that recent stock price increases are unsustainable.
- Price Target Adjustments: Alcoa's price target was raised from $58 to $71 based on a 5x estimated 2026 EBITDA, although nearly half of its estimated 2025 EBITDA comes from its alumina segment, which is currently facing depressed prices.
- Market Outlook: The analyst sees no imminent relief from weakness in the alumina market for Alcoa and expresses skepticism about tariff relief for its Canadian operations, indicating no apparent benefits from the Trump administration.
- Kaiser Aluminum Valuation: Kaiser Aluminum's price target was increased from $108 to $120, reflecting a valuation that now accounts for margin expansion into 2026, while the analyst prefers Constellium (CSTM) as the favored aluminum processor due to its better exposure to expanding scrap spreads.
Analyst Views on AA
Wall Street analysts forecast AA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AA is 40.38 USD with a low forecast of 33.00 USD and a high forecast of 45.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
8 Buy
3 Hold
1 Sell
Moderate Buy
Current: 65.670
Low
33.00
Averages
40.38
High
45.00
Current: 65.670
Low
33.00
Averages
40.38
High
45.00
About AA
Alcoa Corporation is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation. The Company’s operations are comprised of two business segments: Alumina and Aluminum. The Alumina segment primarily consists of its bauxite mines and alumina refineries, which generally include the mining of bauxite and other aluminous ores, as well as the refining, production, and sale of smelter grade and non-metallurgical alumina. The alumina produced by this segment is sold to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. The Aluminum segment consists of the Company’s aluminum smelting and casting operations along with the Company’s energy production assets in Brazil, Canada, and the United States. It has direct and indirect ownership of 26 operating locations across nine countries on six continents.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
