Aluminium stock Alcoa has 40% upside from here: Credit Suisse

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on May 11, 2023
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  • Credit Suisse upgraded Alcoa Corp to "outperform" on Thursday.
  • Analyst Curt Woodworth explained his bullish view in a research note.
  • Alcoa stock is currently down more than 35% versus its recent high.

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Alcoa Corp (NYSE: AA) has been in a massive downtrend over the past two months but a Credit Suisse analyst is super bullish on its prospects from here on out.

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Alcoa stock could climb all the way up to $50

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On Thursday, Curt Woodworth upgraded the aluminium stock to “outperform” and announced a price objective of $50 that suggests about a 40% upside from here.

The analyst is positive on Alcoa stock primarily because he expects a significantly recovery in LME aluminium prices next year. His research note reads:

Aluminium has compelling secular demand growth driven by increased consumer preferences for sustainable materials as aluminium is infinitely recyclable (packaging).

Woodworth recommends sticking to the Pittsburgh-based company even though it reported a bigger than expected loss for its first financial quarter in April. Alcoa shares are down more than 35% versus its recent high at writing.

Other positive catalysts for the aluminium stock

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The Credit Suisse analyst likes Alcoa stock also because he’s convinced that the Chinese outlook will pick up in the back half of the current year.

He’s bullish on the company’s revolutionary process that produces aluminium without greenhouse emissions as well. In a research note today, Woodworth said:

Aluminium leverage from the EV/energy transition is greatly underappreciated versus copper. If the Fed cuts rates, USD would weaken and growth expectations would improve materially.

Share price will benefit as Alcoa Corp restarts its smelter in San Ciprián, Spain, he added. Alcoa stock currently pays a dividend yield of 1.13% that isn’t the best in class but is still an additional reason to own this aluminium stock.

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