What To Expect From Alcoa Inc. (NYSE:AA)?

Posted by Kristi Scott January 27, 2014 0 Comment 691 views


The stock prices of Alcoa Inc (NYSE:AA) shed some gains on Friday as it lost close to 5% and closed at $11.44. The company’s shared had been on an unexpected upward rally as it gained almost  21 percent over the past 5 days.

Value-Added Products

The momentum which drove the company higher is centered around the value-added aluminium products, which has gained the company’s  increasing emphasis in the recent past. Alcoa has been aggressively engaged into pushing the car makers to manufacture high-volume cars with an increased ratio of aluminium. And it seems, that Alcoa’s efforts are finally getting its fruits. Ford, has recently decided to produce its F-150 with the aluminium body. Apart from this, Alcoa is also targeting aerospace companies to promote  its aluminium products. It has gained some success on this front as it has increased its chances to profit as the Airbus Group and The Boeing Company (NYSE:BA) started placing orders for modernized jetliners.

Recently, JP Morgan has also rated the stock to ‘Overweight’ as they see more pressure to build on aluminium prices. This will result in more earnings for the company for the time being. The firm has revised the price target of Alcoa from $9 to $15 now.

Cost-Reduction Plans

Another aspect which is strengthening the company is its measures to reduce costs. During this month, the aluminium maker decided to close down its two remaining pot liners at Massena East. The aluminium production lines were uncompetitive and therefore, the company was swift in its decision to exit its operations there. Moving in this direction, the company had announced late last week that it has provisioned for a lay off of 332 people. 50 among these lay offs will be retained for a period of two years. The final closure of the plant is expected to begin on April 17.



About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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