Wells Fargo has upgraded Alcoa, an aluminum producer, to an overweight rating from equal weight, indicating a positive outlook for the company's stock. Analyst Timna Tanners set a new price target of $70, which represents a potential upside of 10.7% from the stock's closing price on Wednesday.
Alcoa's shares have already shown strong performance in 2026, increasing by 19%, significantly outpacing the S&P 500's 7.6% gain during the same period. Tanners believes that the current strength in the aluminum market is not fully recognized by investors.
She highlighted that aluminum futures have risen over 15.5% year to date and more than 50% over the past year, driven in part by geopolitical tensions, such as the U.S.-Iran war, which have increased demand and prices. Tanners expressed confidence that aluminum prices could remain strong into 2027 due to limited global capacity and low inventories.
Additionally, she noted potential catalysts for Alcoa's stock, including plans to monetize idled assets for data center conversions and the possibility of divesting the Massena East site, which could further enhance share value. While the overall sentiment is positive, analysts are divided on Alcoa, with eight recommending a buy or strong buy, while seven suggest hold or underperform ratings