But demand isn't really the issue, Aldo Mazzaferro, senior steel, metals, and mining analyst at Macquarie Securities, told CNBC.
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Calling the downstream operations "a real gem," the analyst said, the business is "a consumer of aluminum and other metals, and it sells into growing markets where it has good margins and good unit growth and good pricing power."
While that has helped Alcoa overcome weaker aluminum pricing, growing supply out of China will be an issue for the company and the stock price, the analyst said.
"We continue to have this longer-term view that Chinese aluminum production is ultimately going to cause a reduction in cost and keep pressure on pricing," he said.
Moreover, Michael Yoshikami, founder and CEO, Destination Wealth Management, told CNBC that Alcoa's "revenue numbers are not coming in weak because of sales, they're coming in weak because of the price of aluminum."
Although Alcoa has made an effort to shift its focus from the upstream business, where earnings are exposed to fluctuations in metal prices, "as good as it's going in the downstream businesses, the earnings are just not enough to spark any excitement in the shares," Mazzaferro said.
With the stock trading at about 17 times earnings, Mazzaferro said he has an issue with valuation given the concerns about earnings.
Other analysts also cut their price targets on the stock following its earnings announcement. Nomura and UBS, which both rate the stock a "neutral," cut their price targets by $1 to $8 and $9, respectively.
The Macquarie analyst is also worried about the potential for a credit rating downgrade. "It's a little bit of an issue," he said, but added, "they still have a lot of levers to pull before they have to dilute the earnings on the balance sheet."