Aluminum producers Alcoa Inc. and Alcan Inc. saw their shares decline yesterday after Prudential Securities analyst John Tumazos downgraded the industry to "unfavourable" from "favourable," saying that U.S. demand for the metal may decline at a time of rising Chinese output.
He cut Alcan cut to "underweight" from "overweight" and Alcoa to "neutral weight" from "overweight." Mr. Tumazos slashed his 12-month price target on Alcan's U.S.-traded shares to $48 (U.S.) from $60.
Blaming higher costs and the appreciation of the euro, the Prudential analyst lowered his 2007 profit forecast to $6.26 from $7.02. For 2008, he trimmed his estimate to $5.57 from $5.81.
Alcan shares dropped 23 cents to $61.45 (Canadian) in Toronto. Alcoa ended yesterday's session at $33.85 (U.S.), down 22 cents in New York.
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