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Ahead of the Bell: Alcoa

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October 7, 2013 08:38 AM EST | AP

NEW YORK — NEW YORK (AP) — A Stifel Nicolaus analyst lowered his price target for Alcoa Inc., citing a recent drop in aluminum prices.

Paul Massoud, who reaffirmed his "Buy" rating for the stock, cut his price target by $1 to $11. In his Friday note, he also lowered his third-quarter earnings prediction by 3 cents to 6 cents per share.

The company is set to report its results on Tuesday. Analysts, on average, expect earnings of 6 cents per share, according to FactSet.

Massoud said that aluminum prices during the recent quarter were significantly lower than they were during the second quarter of the year, reducing the amount that Alcoa could charge for its products.

The analyst noted that the company announced plans during the quarter to significantly cut its capacity, lowering its costs. Coupled with additional cost cuts, he said he thinks the moves will result in better-than-expected savings for the company.

Alcoa shares fell 8 cents to $7.88 in premarket trading. Its shares are down 16 percent since hitting a 52-week high of $9.37 in mid-February. They sank as low as $7.63 in early July.