Tigress Financial Upgrades Alcoa (AA) to Strong Buy; Auto, Aerospace Remain Key Growth Segments

Tigress Financial Partners upgraded Alcoa (NYSE: AA) from Buy to Strong Buy.

Analyst Philip Van Deusen said,

AA’s Q3 solid quarterly results confirmed our belief that AA’s transition to higher value-added businesses will continue to drive increasing Economic Profit and greater shareholder returns. We believe AA’s performance will also be bolstered by strong long-term trends in global air travel and light-weighting in the automotive industry, which is in its infancy. We would be aggressive buyers of AA’s stock.

Van Deusen also notes that aluminum usage in the auto sector is still in its infancy. The analyst commented, There has been plenty of press about Ford’s use of aluminum sheet in its 2015 F150 and we believe this will be one of the most important trends in the automotive industry as manufacturers seek to meet emissions standards in the U.S. and globally. AA’s Davenport facility is ramping up production to supply Ford with high strength aluminum sheet and military-grade alloy. Even though this opportunity is a small part of AA’s business, the company is already anticipating future demand by expanding its auto capabilities to another plant opening in Tennessee in mid-2015. We hear that Chrysler is considering using aluminum sheet in its next generation Jeep Wranglers.

For an analyst ratings summary and ratings history on Alcoa click here. For more ratings news on Alcoa click here.

Shares of Alcoa closed at $15.39 yesterday.

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