Stock Analyst Note
Alumina: Price Strength Lifts Near-Term Outlook
We increase our stand-alone fair value estimate for no-moat Alumina by 11% to AUD 1.50 and our published fair value estimate by 3% to AUD 1.58. The increase in the stand-alone fair value is due to strength in the alumina price and alumina futures, while the published fair value uplift additionally reflects strength in Alcoa’s share price via its scrip bid for Alumina. At AUD 1.68, Alumina shares are mildly overvalued relative to published fair value in 3-star territory.