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Alcoa merits strong recommendation from Morgan Stanley

Published 11/07/2016, 11:41 AM
Alcoa merits strong recommendation from Morgan Stanley
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MS
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  • Alcoa (AA +3%) initiated with an Overweight rating and a $27 price target at Morgan Stanley (NYSE:MS), which says shares are pricing in a commodity outlook that is meaningfully below spot aluminum and alumina prices.
  • The firm says its valuation is based on the view that the aluminum cycle is at a low point, and its multiples are higher than the mid-cycle average but in line with peers.
  • “In recent weeks, we have seen some favorable trends that are supportive of continued strength in aluminum and alumina prices, and we think enhance the risk-reward for AA shares,” according to Stanley analyst Evan Kurtz.

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