12 Best Basic Materials Stocks to Buy According to Analysts

6) Alcoa Corporation (NYSE:AA)

Average Upside Potential: 39.8%

Number of Hedge Fund Holders: 42

Alcoa Corporation (NYSE:AA) is engaged in producing and selling bauxite, alumina, and aluminum products. Morgan Stanley analyst Carlos De Alba gave a “Buy” rating on the company’s stock, setting a price target of $51.00. The analyst’s rating stems from a combination of factors, including the company’s strategic initiatives to improve efficiency and cut costs, together with the reduction in risks related to bauxite mining in Western Australia. Elsewhere, Analyst Lawson Winder from Bank of America Securities reiterated a “Buy” rating on Alcoa Corporation (NYSE:AA)’s stock, giving a price target of $58.00.

Winder’s rating is based on numerous positive strategic and market factors. As per the analyst, Alcoa Corporation (NYSE:AA) reported Q4 2024 adjusted EBITDA that was in line with expectations, showcasing stable financial performance. Notably, the company’s adjusted EBITDA, excluding special items, came in at $677 million in Q4 2024, an increase from $455 million in Q3 2024. Furthermore, Alcoa Corporation (NYSE:AA) continues to work on improving profitability at its San Ciprián site and has been exploring monetization of idle assets together with debt repayment strategies, which can enhance its financial position.

Analyst Lawson Winder believes that Alcoa Corporation (NYSE:AA) has promising prospects because of the expected strong demand for aluminum, courtesy of supply constraints and gradual alumina price normalization.  The company’s significant aluminum production capacity, together with its competitive cost structure in bauxite and alumina, places Alcoa Corporation (NYSE:AA) in a favorable position to capitalize on favourable market dynamics.