JPMorgan's Preference Shifts To Arconic In Base Metals; Downgrades Kaiser, Constellium

JPMorgan analyst Michael Glick upgraded Arconic Corp ARNC to Overweight from Neutral and raised the price target to $40 (an upside of 28%) from $35.
Glick notes the company offers exposure to both the auto and aerospace recoveries and the "strong" secular demand for aluminum can sheet.
The analyst says Arconic should have among the most leveraging to improvements in the automotive supply chain in his coverage.
The analyst downgraded Constellium SE CSTM to Neutral from Overweight and lowered the price target to $21 (an upside of 21%) from $22. In base metals, the analyst's preference shifts to Arconic.
Glick downgraded Kaiser Aluminum Corp. KALU to Underweight from Neutral and lowered the price target to $98 (an upside of 2.4%) from $117.
The analyst notes that the Warrick acquisition significantly reduces the company's exposure to more cyclical industries like aerospace and auto but could negatively impact Kaiser's trading multiple versus history.
Glick further adds that while Kaiser has a "clean" balance sheet, it produces relatively light free cash flow versus peers Arconic and Constellium.
Price Action: ARNC shares are trading higher by 4.76% at $31.26, KALU lower by 1.27% at $95.69, and CSTM lower by 1.41% at $17.41 on the last check Friday.

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