Analyst Note| Mark Taylor |
Our AUD 1.20 per share fair value estimate for no-moat Alumina stands. The company owns 40% of the world’s largest alumina refining enterprise, Alcoa World Alumina and Chemicals, or AWAC. AWAC reported higher-than-expected fourth-quarter operating costs, with caustic soda and Spanish gas prices in particular remaining elevated. We reduce our 2022 EPS forecast by 30% to AUD 0.05. Further, we more than halve our fiscal 2023 EPS forecast to AUD 0.04 from AUD 0.085 prior. The latter anticipates higher input costs persisting for longer than we’d previously allowed.