Alcoa upgraded at Deutsche Bank, may be turning around

Alcoa (AA) is upgraded to Hold from Sell with a $10 price target, up from $7.50, at Deutsche Bank, which cites its expectation of higher realized aluminum prices for the foreseeable future; however, the firm sees continued downside risk given the increasingly “black-box" nature of regional premia price support.

A weekend WSJ report says Alcoa, which reports Q1 earnings tomorrow, may be turning around due to its commitment to using aluminum for cars as it invests $575M to expand new lines in Iowa and Tennessee, and aluminum producers have began to cut capacity to try to counteract a glut.

The firm reiterates Buy ratings on Freeport McMoRan (FCX) and Cliffs Natural Resources (CLF) due to potential near-to-medium term catalysts - resumption of Indonesia copper exports for FCX and progress towards monetization of the Bloom Lake mine for CLF.

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Comments (3)
  • haleiwahu
    , contributor
    Comments (4001) | Send Message
    I don't think it's AA that has any turning around to do. AA is a well run operating machine that is lean and mean. It's cyclical and nothing anybody can do about it. It's the economy that has to turn around and then AA will be doing just fine.
    7 Apr 2014, 11:48 AM Reply Like
  • manfredthree
    , contributor
    Comments (3103) | Send Message
    In an economy that is clearly stuck in a multi-year pattern of 'growth due to rounding errors' , AA is taking advantage of reducing primary capacity without risk of the usual price manipulation accusations. That window will not exist once the Chinese cease their subsidies. AA is at the same time taking significant advantage of others needs to reduce costs and improve efficiencies in the world of transportation. A perfect storm for AA's profitability well before the Fed is able to materially exit.
    8 Apr 2014, 06:10 AM Reply Like
  • chunghk
    , contributor
    Comments (345) | Send Message
    CLF - "Buy" rating suspicious and unjustified. "Hold" only. $20 to $22 range bound. Longs and shorts equal chance for day traders. No hope for further advance. Strong barriers @$23, $25, $28, $31. Extremely concrete barrier @$31. Thanks,
    9 Apr 2014, 07:52 PM Reply Like
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