- Alcoa (AA +2.8%) is upgraded to Buy from Neutral with a $14 price target at UBS, which is positive on the company's transformation and expects mid- and downstream growth.
- UBS likes the significant shift in AA's business to expand its lightweight, multi-material business relative to its traditional upstream commodity base since Klaus Kleinfeld became CEO.
- The firm believes AA's price multiple could expand over time as less volatile midstream and downstream businesses grow and become a greater portion of the company, especially if aluminum prices continue to remain weak; this growth also would decrease AA's already declining sensitivity to the aluminum price.