Alcoa upgraded to Overweight from Equal Weight at Morgan Stanley

Morgan Stanley upgraded Alcoa to Overweight from Equal Weight with a price target of $50, up from $36.50 as part of a broader research note on U.S. Metals & Mining names. Global decarbonization and electrification trends, rising geopolitical tensions testing legacy supply chains and increasingly challenging conditions to develop new supply continue to underpin a positive outlook for the mining sector in the coming years, though the firm prefers companies with short-term catalysts, the analyst tells investors in a research note. Alcoa is taking several actions to increase productivity, reduce costs, and optimize its asset portfolio, targeting a $645M annualized EBITDA uplift when completed in 2025, and tje management reported solid progress as of Q1 of 2024, the firm states. Morgan Stanley adds that alumina capacity disruptions have reached about 5.9 mnt, representing about 10% of global ex-China supply, and together with China’s need to import more alumina, this is tightening alumina supply globally and is likely to keep alumina prices more elevated than they have been historically, the analyst added.