UPDATE: Wolfe Research Starts Arconic (ARNC) at Outperform

Wolfe Research analyst Timna Tanners initiates coverage on Arconic (NYSE: ARNC) with a Outperform rating and a price target of $42.00.

The analyst comments "We launch on Arconic (ARNC) with an Outperform and $42/shr price target, in the context of a Market Overweight stance on specialty/downstream metals. Shares substantially lagged the broader S&P ytd, up ~8% vs ~25%, as key auto and aero end markets underperformed. We expect shares can regain traction in 2022/23E as these markets recover, plus anticipate measures to contain pension liabilities to boost FCF and return of cash to shareholders ahead. Ground Transportation comprised 35% of 2019 pre-pandemic revenues, with aero accounting for 18%. Better auto demand is more likely a 2022E story, in our view, with our auto team anticipating U.S. production up 22% y/y amid restocking. Aero recovery likely lags into 2023 and beyond. Mgmt guidance of growing EBITDA by double digits into 2022E seems achievable off a tough 2021E. We also expect shares can re-rate higher once it has a longer track record, having spun from the larger Arconic in 2020."

For an analyst ratings summary and ratings history on Arconic click here. For more ratings news on Arconic click here.

Shares of Arconic closed at $31.47 yesterday.

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