- Alcoa (AA +1.2%) continues its post-earnings rise, and Morgan Stanley jumps in with an upgrade of the shares to Overweight from Equal Weight.
- Stanley thinks the risk to upstream pricing is skewed to the upside; slowing growth of Chinese supply, combined with ex-China capacity cuts, should allow Alcoa to achieve premium pricing.
- The firm also cites an approaching recovery in the aerospace plate business starting in 2015 and in the U.S. can sheet market from 2016 due to declining supply from capacity allocation to auto products.
- Also, AA is one of the largest U.S. sheet producers, and the firm expects it to have ~30% share of U.S. auto sheet market.
at Zacks.com (Jan 20, 2015)