Alumina’s production numbers were largely in line with Macquarie’s expectations but realised prices surprised to the upside. AWAC JV partner Alcoa has announced a review into up to 4mtpa of alumina production and 1.5mtpa of aluminium production.
The broker sees Alumina’s Portland operation as a possible target.
Earnings risk is to the downside, the broker warns, given current spot prices suggest a cut of -4-10%. Underperform and $1.50 target retained.
Target price is $1.50.Current Price is $2.28. Difference: ($0.78) – (brackets indicate current price is over target). If AWC meets the Macquarie target it will return approximately -52% (excluding dividends, fees and charges – negative figures indicate an expected loss).