Alcoa Q1 Net Income Hits $425M; UBS Lifts Target to $80
Alcoa's Q1 revenue was $3.19B, net income climbed to $425M and EBITDA to $595M, yet operating cash flow fell $179M on inventory timing. UBS increased its rating to Buy with an $80 target, forecasting aluminium prices above $3,000/t and a 1.8M-tonne global deficit in 2026.
1. Q1 Financial Results
Alcoa posted Q1 revenue of $3.19B, net income of $425M and EBITDA of $595M, reflecting strength in aluminium prices. However, operating cash flow was negative $179M due to inventory timing and shipment repositioning, prompting management to flag cash flow as a key metric for Q2.
2. Market Forces Tighten Aluminium Supply
Disruptions at Middle East smelters, ongoing US 50% tariffs and shipping bottlenecks have tightened global aluminium markets, pushing prices above $3,000/t. Alcoa is restarting capacity, including its San Ciprián smelter, but its alumina segment remains pressured by oversupply from China and Indonesia.
3. UBS Upgrade and Financial Outlook
UBS upgraded Alcoa to Buy and raised its price target to $80, citing a projected 1.8M-tonne aluminium deficit in 2026. The bank forecasts net debt dropping below $500M by year-end and highlights potential H2 2026 share buybacks and the sale of the Massena East smelter to accelerate cash returns.