The firm cited that Alcoa is working through a challenging period in its portfolio transformation and is facing risks to its commodity business.
Alcoa produces and manages primary aluminum, fabricated aluminum, and alumina.
Last year was a "goldilocks" period for aluminum with high premiums, reduced Indonesian bauxite supply, and Chinese curtailments on smelting/exports, analysts said.
While the company has radically changed its cost structure, global trends are reversing and it has to now "aggressively execute on integration" to meet its targets, the firm noted.
Shares of Alcoa are gaining 0.08% to $11.78 in Monday's early morning trading session.
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 multiple strengths, 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 notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: