Barrenjoey cuts PT on Alumina after margins miss expectations

Alumina

22/04/2022 02:24

** Brokerage Barrenjoey lowers price target on aluminium
producer Alumina Ltd  AWC.AX  after margins decline due to
sharply higher costs, despite higher realised alumina prices 
    ** EBITDA margin for its main business operation, Alcoa
World Alumina and Chemicals, its joint venture with Alcoa Corp
 AA.N  during Q1 was $88/t, below Barrenjoey expectations of
$100/t 
    ** Brokerage says higher costs were due to higher European
gas prices, stronger Brazilian real, increased energy usage in
Brazil, operational issues in Western Australia 
    ** Cuts PT to A$2.30 from A$2.40, keeps "neutral" rating
unchanged
    ** Expects margins to improve in Q2 
    ** Out of eleven analysts covering AWC, six rate it "buy,"
five rate it "hold" and median PT is A$2.15 - Refinitiv Eikon
data
    ** AWC down as much as 6.2% to A$1.755 in its second
straight session of losses to be the fourth biggest loser on the
Australian benchmark stock index  .AXJO 
    ** Stock up 0.3% YTD, as of last close 


 (Reporting by Harshita Swaminathan)
 ((Harshita.Swaminathan@thomsonreuters.com))