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October 9, 2008 Dear Friend, Attached you will find updates for both AA and AWC. We updated both models following Alcoa's earnings call as Alcoa's Alumina segment gave us an updated view of AWC. We are lowering our price target to $9 on AWC while raising our investment rating to neutral as the stock price has fallen off more than we had anticipated at $6.79. Additionally, We feel that the Alumina segment of Alcoa did not have as poor of earnings as many of the other segments which is a positive note for AWC. For alcoa we lowered our price target to $24 as we lowered our earnings forecasts due to higher costs and lower share repurchases. We frown upon the suspension of the share repurchase program as this is an ideal time to buy back stock. We left our investment rating at neutral, however, as we feel aluminum stocks will be slow to recover with the rest of the market due to the poor aluminum market outlook we are forecasting. Faithfully yours, Joseph G Reagor |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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