On April 22, 2023, investors in Alcoa Co. (NYSE:AA) experienced a decline in share value of approximately 4.8%. The reason for such a downgrade was due to B. Riley Financial lowering their price target on the stock from $44.00 to $43.00. This news came as a shock to many investors who had high hopes for the industrial products company’s stock, especially with Alcoa trading as low as $38.16 at one point during the trading day.
The decline in share value was not the only concerning news for Alcoa Co. investors on this particular day. The average daily trading volume of 5,108,869 shares took a hit with only 2,660,315 shares being traded which marked a decrease of approximately 48%. The last traded price for Alcoa Co.’s shares was recorded at $38.31 which further added to the disappointment felt by many investors.
As disappointing as those numbers may seem for some investors, others prefer to look at the larger picture which includes the quarterly dividend announcement that was made by Alcoa Co.. On March 23rd a dividend payment was issued which represented an annualized dividend yield of 1.04%. Stockholders of record received $0.10 per share after qualifying for eligibility prior to March 7th and with an ex-dividend date of March 6th.
In spite of challenges that arose throughout this recent trading period for Alcoa Co., several large investors have made changes to their positions in response to its performance which could result in positive outcomes later down the road. DnB Asset Management AS increased its stake in Alcoa by 145%, while Lesa Sroufe & Co raised their holdings by just over one percent.
Carmel Capital Partners LLC and Oliver Luxxe Assets LLC also increased their holdings but by roughly three and eight percent, respectively. Bourgeon Capital Management LLC increased its holdings impressively by 381% in Alcoa Co.’s stock which can be seen as a token of confidence in the future of the industrial products company.
Many investors will keep an eye on how Alcoa Co. unfolds over the coming days and weeks to see if it bounces back after this recent slump. Despite obstacles faced during this period, it remains quite possible for traders to devise strategies that could bring wealth and diversification into their lives with Alcoa Co. stocks in spite of any momentary shifts that occur such as those observed during April 22, 2023’s trading day.
Alcoa Falls Short of Earnings Expectations, Faces Industry Challenges
Alcoa Misses Earnings Expectations
Aluminum producer Alcoa (NYSE:AA) released its quarterly earnings report on April 19th, disappointing investors with an EPS of ($0.23). This missed the consensus estimate of ($0.05) by a significant margin of ($0.18). The company reported revenue of $2.67 billion during the quarter, which was short of analysts’ expectations of $2.77 billion.
Several research analysts recently issued reports on the stock, raising concerns regarding the company’s performance in light of these results. UBS Group increased their price objective to $50 from $44 and gave it a “neutral” rating in February, while Morgan Stanley cut their price objective to $47 from $52 and gave it an “equal weight” rating in March. A total of seven analysts have given Alcoa a hold rating, one has rated it sell and two have assigned it a buy rating.
In response to weak demand for aluminum products and low market prices, Alcoa has scaled back production across various locations worldwide over the past year. This move resulted in lower expenses but also led to weaker output, as seen in the decline in revenue.
Furthermore, executives at Alcoa recently sold large amounts of company stock- EVP Tammi A. Jones sold 1,100 shares for over $57,000 and EVP Jeffrey D. Heeter sold over $2 million worth of shares during Q1 alone.
Despite these recent challenges, Alcoa remains a well-established player in the metals manufacturing industry with a market capitalization of $6.84 billion and is taking steps towards growth by investing in new technologies, such as 3D printing and aerospace manufacturing.
As we move forward into 2023 with market volatility on the rise again after months of stability since COVID recovery measures were put into place worldwide; companies like Alcoa will need to innovate to stay in the game. Experts predict that Alcoa will post an EPS of 2.09 for the current fiscal year.
