Positive Outlook for Alcoa Amid Stable Operations and Favorable Market Conditions

Morgan Stanley analyst Carlos De Alba maintained a Buy rating on Alcoa (AA – Research Report) today and set a price target of $35.00.

Carlos De Alba has given his Buy rating due to a combination of factors that suggest a favorable outlook for Alcoa. One significant factor is the recent revocation of mining licenses in Guinea, which has not impacted Alcoa’s operations there. This stability in Alcoa’s bauxite mine operations, coupled with the potential for increased bauxite prices due to supply disruptions, positions the company well for enhanced profitability.
Moreover, Alcoa’s strategic shift to increase bauxite shipments to third parties following the closure of its Kwinana refinery indicates a proactive approach to maximizing revenue. The potential uplift in EBITDA from rising bauxite prices further supports a positive financial outlook. Additionally, the current market conditions, including China’s alumina production cuts, are likely to sustain higher alumina prices, benefiting Alcoa’s overall business performance.