Why Alcoa Stock Popped Today
Alcoa (NYSE: AA) shares shot through the roof on Tuesday, jumping as high as 10.7% as of 2:40 p.m. EDT. With yet another analyst joining the bandwagon who believes Alcoa shares have significant upside ahead, more and more investors are betting on the stock.
Morgan Stanley turned bullish about the metals and mining sector in June and singled out Alcoa as a top pick. This morning, Morgan Stanley reiterated its buy rating on the stock and thinks it could be worth $51 per share. That's a whopping 62% upside from Alcoa's Tuesday opening price of around $31.55 a share. Morgan Stanley believes the company could earn $0.94 per share in its third quarter versus a loss in the year-ago period.
Morgan Stanley isn't the only one that sees Alcoa performing so well. Just yesterday, Goldman Sachs added Alcoa to its conviction buy list and upped its price target on the stock to $51 a share. Goldman Sachs is betting on rising aluminum prices; sees Alcoa's earnings before interest, tax, depreciation, and amortization (EBITDA) rising by 20% for every 10% increase in aluminum prices; and believes the company's efforts to deleverage should boost capital returns.
Source Fool.com
