Goldman Sachs Raises Estimates on Alcoa

Goldman Sachs is raising its estimates on Alcoa AA. Goldman Sachs raises its P/E multiple assumptions by 19%/15%/8% for 2011/2012/normalized estimates and raising our EV/EBITDA multiple assumptions by 15%/8%/8% inline with an increase in multiples across our aluminum stocks. In a note to clients, Goldman Sachs writes, "We expect a significant albeit forecasted aluminum price tailwind (4Q10 15 day lagged aluminum price of $1.05/lb equaled our 4Q forecast of $1.05) in the 4Q to be partially offset by a weaker dollar. The net result is a 4Q10E EPS of $0.18 (up from $0.15 previously) bringing our 2010E to $0.50 from $0.47." Goldman Sachs maintains its Neutral rating and raises its price target from $12 to $14. AA closed yesterday at $14.46.