NEW YORK (TheStreet) -- Shares of Alcoa  (AA) - Get Report are tumbling down 6.26% to $14.23 in mid-morning trading Wednesday, after analysts at Bank of America/Merrill Lynch lowered its rating to "neutral" from "buy" on shares of the aluminum producer this morning.

The firm also cut its price target to $17 from $20, citing "worsening aluminum fundamentals" for the downgrade. Analysts at BofA/Merrill Lynch noted pressure from LME warehouse rules changes as well as Chinese exports affecting the company's near-term outlook.

The firm added that while aluminum can be more defensive versus other commodities, it is no longer expected that falling premiums can be offset by LME price strength in the near term. 

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Andrew Wilkinson, chief market analyst at Interactive Brokers issued a note on Alcoa this morning saying:

"What caught the attention of option traders in the first several minutes of trading was a 3,600-lot strangle in the April expiration, involving the simultaneous trade of 15-strike call options and 14-strike put options for a combined premium of 90 cents. Volume continues to build at those same strike prices. Implied volatility on the name has jumped by 8.7% to 31.6% and stands just above the historic reading of movement on the underlying share price. Sellers of a strangle benefit should the stock remain range bound by expiration and face breakeven values for the strategy above and below the strike prices by the amount of the premium received (implying breakeven points at $15.90 and $13.10). The transaction is more appealing to an option trader as implied volatility boosts the value of each side of the trade. In contrast, a buyer of this strategy might be looking to profit from the onset of uncertainty, which would further boost the total premium on the options in coming days or weeks."

Yesterday, the aluminum producer announced that it completed its acquisition of TITAL. TITAL is a manufacturer of titanium and aluminum structural castings for aircraft engines and airframes.

Alcoa said the TITAL acquisition establishes its titanium casting capabilities in Europe, as well as expands its aluminum casting ability.

New York City-based Alcoa is engaged in lightweight metals, products, and solutions and offers its technology and expertise in automotive and aerospace transportation, building and construction, consumer electronics and packaging.

Separately, TheStreet Ratings team rates ALCOA INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALCOA INC (AA) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
• ALCOA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ALCOA INC turned its bottom line around by earning $0.19 versus -$2.15 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.19).
• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 106.8% when compared to the same quarter one year prior, rising from -$2,339.00 million to $159.00 million.
• Net operating cash flow has significantly increased by 58.47% to $1,458.00 million when compared to the same quarter last year. In addition, ALCOA INC has also vastly surpassed the industry average cash flow growth rate of -57.24%.
• Powered by its strong earnings growth of 105.02% and other important driving factors, this stock has surged by 25.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
• You can view the full analysis from the report here: AA Ratings Report