Citi sees a 35% upside in this aluminum stock

Alcoa Corp (NYSE: AA) down about 45% versus its record high last year is an opportunity to buy a quality name at a deep discount, says Alexander Hacking – Equity Research Analyst at Citigroup.

Alcoa stock should be worth $65

Hacking upgraded the aluminum producer this morning to “buy” and raised his price objective to $65 a share that suggests a 35% upside from here.

The Citi analyst expects Alcoa Corp to significantly benefit as China continues to abandon its rather stringent COVID policies.

He’s constructive on Alcoa stock even though the Pittsburgh-headquartered firm reported weaker-than-expected revenue for its fourth financial quarter in January.

What else could boost Alcoa stock?

Hacking pointed to copper and coal that are already benefitting from China reopening and said Alcoa Corp will likely be the next in line.

The Citi analyst is bullish as the macro outlook is turning more positive for this industrial stock and yet it remains out of favour to date. In his research note today, he added:

Earlier this month, a Bloomberg report said that the U.S. was considering a 200% tariff on Russian aluminum. If imposed, that would be a meaningful catalyst for the Alcoa stock as well.