Stock Picks: Alcoa, Cinemark, Continental Airlines, Pep Boys

Wall Street analyst opinions on stocks making headlines in Friday's market

Alcoa Inc.: JPMorgan Chase equity analyst Michael Gambardella lowered a rating on shares of Alcoa Inc. (AA), the largest U.S. aluminum producer, to neutral from overweight on Apr. 9. He also lowered a price target on the shares to $16.50 from $21.50.

In a note, Gambardella said he was lowering the rating on the stock and removing it from JP Morgan's Focus List to reflect his new 2011 earnings per share (EPS) estimate of 48 cents, which based on an aluminum price forecast of 92 cents per pound from the firm's metal strategist.

Gambardella said that although Alcoa has taken "significant" costs out of its business by closing high-cost operations and through additional procurement and productivity savings, he thinks the company will struggle to generate attractive returns on JPMorgan's 2011 aluminum price forecast of 92 cents per pound.

Cinemark Holdings Inc.: Lazard Capital equity analyst Barton Crockett lowered a rating on shares of movie-theater owner Cinemark Holdings Inc. (CNK) to hold from buy on Apr. 9.

In a note, Crockett said he believes that "we are within a year of hitting the end" to the 3D-driven boost to box office recepits that, as he expected, made Cinemark shares, and those of other operators, standout performers for the past 12 months. The analyst noted that Cinemark shares hit his $18 price target.

Crockett said box office receipts were robust in the first quarter of 2010, but the "top-heavy, Avatar-skewed movie mix" could push film print costs to disappointingly high levels -- driving his first-quarter revenue estimate above the Wall Street consensus view but his projections for adjusted EBITDA and EPS below consensus levels. The analyst cut EPS estimates for 2010 to 96 cents from 99 cents and for 2011 to $1.01 from $1.10.

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