Markets & Finance

Prudential Downgrades Alcoa to 'Hold'

Prudential downgraded Alcoa (AA) to hold from buy.

Analyst John Tumazos says he's downgrading because Alcoa's stock has risen almost to his $30 target, which he had earlier raised due to lower interest rates, an improved economic outlook, and rising stock markets. He notes aluminum markets have been stronger than expected owing to dollar weakness and strong demand.

Tumazos raised his 2003 London Metals Exchange spot ingot price estimate to 64 cents, from 62 cents per pound, however, he keeps Alcoa's earnings per share estimate at 95 cents for 2003, and $1.28 for 2004, as higher aluminum prices were offset by a lower price premium, keeping realizations flat.

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