Alcoa upgraded at Deutsche Bank, may be turning around

|By:, SA News Editor

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.