Alcoa (AA) Could See $60 on Takeover -Barron's

An article published in Barron's this weekend highlighted reasons why Alcoa (NYSE: AA) shares could move higher. Specifically, Barron's likes Alcoa as it 1. should benefit from continuing strength in aluminum fundamentals and 2. has consistently been rumored as a potential takeover target for larger metal mining companies such as BHP Billiton (NYSE: BHP) or Xstrata.

Aluminum prices are up about 20% so far in 2008, while shares of Alcoa are only up about 7% on a year-to-date basis. Analysts are estimating that aluminum prices could reach $2 a pound in 2009, up significantly from about $1.30 a pound currently. Alcoa currently produces about 20% of the world's bauxite and alumina and holds "irreplaceable assets", according to Barron's: mines, refineries and smelters on several continents.

Considering Alcoa's potential for a buyout by a larger mining company, Barron's calls Alcoa the "only sizable independent Western aluminum company left."

A Citi analyst, cited in the positive Barron's article, has a $50 price target on shares of Alcoa. In a takeover, the analyst believes shares of Alcoa could see $60.

Alcoa, Inc. engages in the production and management of primary aluminum, fabricated aluminum, and alumina worldwide.

You May Also Be Interested In

• Deutsche Bank Downgrades Man Group Plc. (EMG:LN) (MNGPY) to Hold
• UBS Upgrades freenet AG (FNTN:GR) (FRTAF) to Neutral
• Jefferies Upgrades DigiCo Infrastructure REIT (DGT:AU) to Buy