Five Stocks To Watch This Week 4/11: AA, CSX, JPM, BAC, DAL

The season starts off slowly this week with Alcoa (AA) reporting, and a handful of other names in the Industrials and banking sector.

Monday, April 11

Tuesday, April 12

Wednesday, April 13

Thursday, April 14

Alcoa (AA)

Materials – Metals & Mining | Reports April 11, after the close.

The first quarter 2016 earnings season unofficially kicks off after tomorrow’s closing bell when Alcoa reports. After a dismal 2015 in which share prices plunged nearly 40%, things have been improving slightly year-to-date. Even so, the aluminum company is poised for another disappointing quarter as they begin to shift resources to a corporate restructure. The Estimize community expects EPS of $0.03, a penny higher than the Wall Street consensus, and revenues of $5.276 B, in-line with the Street. This projects the third consecutive quarter of growth declines for both metrics, with profits expected to fall 89% and sales by 9%.

What to watch: At the moment, the state of aluminum industry is at the mercy of China which accounts for a majority of metals production and exports in the world. Alcoa has fallen victim to economic headwinds in China and is unfortunately expected to close the biggest active aluminum smelter in the U.S. That being said, Alcoa is planning to split itself up into two companies to preserve the profitability of its value-adding operations. After years of building up its value-added and upstream operations, Alcoa believes the two have the strength to run as stand alone entities. The upstream component will continue to produce materials like aluminum while the value-added piece will continue to make things that use upstream materials like engine parts. By eliminating vertical integration, the value-added business will benefit from cheaper metals elsewhere.

CSX Corp (CSX)

Industrials – Road & Rail | Reports April 12, after the close.

The Estimize consensus is calling for EPS of $0.39, just two cents higher than the Street. Revenues of $2.708B are actually below the sell-side estimate of $2.732B, indicating a 10% drop in sales YoY, and the fourth consecutive quarterly decline.