Bank of America Securities has increased its price target for Alcoa Corporation (NYSE:AA) to $38 per share from a previous $33, while keeping an Underperform rating on the stock. This updated price target remains well below Alcoa's current trading level of approximately $63.14, close to its 52-week high of $66.95 and equating to a substantial one-year gain of 71.21%. According to InvestingPro data, the stock currently trades near its estimated fair value.
Alcoa reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $546 million for the fourth quarter of 2025. However, when adjusting for unexpectedly high carbon dioxide compensation benefits received in Spain and Norway, the adjusted EBITDA figure is estimated at $517 million by BofA Securities. This performance was below BofA's estimated $525 million as well as the consensus of $528 million to $532 million, likely impacted by an unplanned outage at Alcoa's Alumar smelter in Brazil.
Looking ahead to the first quarter of 2026, Alcoa has projected a sequential EBITDA decline of $60 million. This anticipated reduction is attributed to a combination of factors including maintenance activities on refineries, lower alumina production volumes, the removal of carbon dioxide benefit payments, and costs associated with restarting operations at the San Ciprián refinery.
Despite these operational challenges, BofA Securities cited stronger-than-expected demand conditions for aluminum as a rationale behind its increased valuation multiple for Alcoa. The firm highlighted ongoing concerns such as tariffs on Canadian aluminum shipments, delays in the San Ciprián ramp-up, and persistent issues at the Alumar facility.
In related developments, Alcoa's fourth-quarter 2025 financial results surpassed analyst expectations with adjusted earnings per share (EPS) of $1.26, compared to a predicted $0.93. The company also posted revenue of $3.4 billion, above the consensus estimate of $3.28 billion, owing to solid operational execution and strategic positioning in the market.
Meanwhile, BMO Capital Markets adjusted its price target for Alcoa downward slightly to $65 from $67 while maintaining a Market Perform rating. Analyst Katja Jancic noted that the recent earnings beat was mainly driven by a one-time CO2 credit rather than sustained operational improvements. The asset sale timeline for Alcoa has also been extended, contributing to the revised price target.
These recent financial disclosures and differing analyst perspectives underscore the complexities in evaluating Alcoa's future outlook amid a combination of favorable demand and operational headwinds.