Prudential lowered its investment ratings on both aluminum company Alcan's (CD

) and steel producer Nucor Corp. to sell from hold.

Analyst John Tumazos says Alcan's pretax earnings per share is likely to be insignificant if recent $0.586 per pound LME ingot prices continue, estimates co. breakeven point is near $0.55/lb., suggesting losses possible.

He noted major $10 billion capital initiatives of past several years are value-destructive, and worsen returns at low prices. He says new CEO, CFO have not introduced new or revised existing action plans. He also said 2002 EBITDA target of $3 billion could be missed by 50% at current prices. He also cuts $30 target to $24.

He downgraded Nucor because its shares are up about 30% from September lows while near-term earnings per share outlook halved with its Sept. 20 EPS warning.