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Alcoa Downgraded to “Neutral” at Goldman Sachs (AA)

The world's largest aluminum producer, Alcoa Inc. ( AA ), on Monday caught a big downgrade from analysts at Goldman Sachs.

The firm said it cut its rating on AA from "Buy" to "Neutral" with an six-month $11 price target. That target suggests an 11% upside to the stock's Friday closing price of $9.91.

Goldman also lowered its fourth quarter earnings estimates for the company from a profit of 8 cents per share to a loss of 3 cents per share. The analyst cited weaker aluminum prices and higher input costs for the move. Additionally, the firm lowered its full-year 2012 and 2013 estimates for AA, again due to weaker margin expectations.

Alcoa shares posted modest gains in premarket trading Monday.

The Bottom Line

Shares of Alcoa ( AA ) have a 1.21% dividend yield, based on Friday's closing stock price of $9.91. The stock has technical support in the $9 price area. If the shares can firm up, we see overhead resistance around the $12 price level.

Alcoa Inc. ( AA ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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