Stock

Is it time to buy Alcoa as stock recovers from the post-earnings dip?

When Alcoa Corporation (NYSE:AA) reported its Q1 2022 earnings at least a week ago, investors were less excited. Revenue of $3.29 billion came short of the expected $3.46 billion but higher than $2.87 billion last year.

Nonetheless, an EPS of $3.06 in the quarter was higher than expectations of $2.86 and $0.79 last year. We believe the quarter results were strong enough to warrant buying a dip, and here is more support.

Timna Tanners gave an outperform rating on Alcoa, with a $102 price target after the quarterly results. He says that aluminum prices are supported by the lack of new supply and an increase in global costs.

The company shared similar views saying that it sees higher prices in the second quarter. It still warned that higher material and energy costs could partly offset the extra returns. Tanners further point out that investors are keen on miners’ names like Alcoa to hedge against inflation. 

With a 25% drop in a month, Alcoa carries a favorable risk and reward ratio on a buy to previous levels. Structural demand for the miner’s products will boost the stock. In five days, the stock has already recovered 4%. The key question to investors now is, where should they buy?

Alcoa stock technical analysis

Source – TradingView

Technically, Alcoa stock is bearish post-earnings. The drop happens after touching an overbought level of $97. Nonetheless, we see a further drop from the current $67 to the likely support of $55. Investors should wait to buy lower after the current decline ends.

Summary

Alcoa stock has been dropping in the month. The missed earnings have heightened the weakness. However, the stock is bound to jump while Wall Street also maintains a buy rating. Consider buying it at $55.

The post Is it time to buy Alcoa as stock recovers from the post-earnings dip? appeared first on Invezz.

Disclaimer: MonopolyWinnersUpdates.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 MonopolyWinnersUpdates.com. All Rights Reserved.

To Top