Here’s Why We’ve Changed Our Price Estimate For Alcoa
Alcoa (NYSE:AA) has completed a planned 1-for-3 reverse stock split, post the approval of the same at a special shareholder meeting on October 5. [1] The company had announced the planned reverse stock split earlier in the year, with the management expecting an increase in the per share stock price for Alcoa to translate into increased liquidity and facilitate the trading of its shares. [2] Alcoa’s shares started trading on a split-adjusted basis from October 6 onwards. Though the reverse stock split does not impact the company’s underlying business, or total value or market cap, it has led to a near tripling of the company’s share price. Accordingly, we have adjusted our model for Alcoa to account for the change in the company’s shares outstanding, which has translated into a tripling of our price estimate for the company.
Have more questions about Alcoa? See the links below.
- What Is Alcoa’s Revenue & EBITDA Breakdown?
- What Is Alcoa’s Fundamental Value Based On Expected 2015 Results?
- By What Percentage Did Alcoa’s Revenue & EBITDA Increase In The Last 5 Years?
- How Has Alcoa’s Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Can Alcoa’s Revenue & EBITDA Grow In The Next 3 Years?
- What Is The Impact Of Alcoa’s Enhanced Aerospace Focus On Revenue Growth From Aerospace End Markets?
- With Alcoa Heading For A Split In 2016, What Will The Two Companies Look Like?
- Which Are The Major Growth Areas For Alcoa Over The Next Three Years?
- Alcoa’s Q1 2016 Earnings Preview: Weakness In Aluminum Prices To Negatively Impact Revenue & Earnings
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Notes:
- Alcoa Inc. Completes 1-for-3 Reverse Stock Split, Alcoa News Release [↩]
- Alcoa Announces Plan for 1-for-3 Reverse Stock Split, Alcoa News Release [↩]