Alumina producer AWC has endured an awful 5-years although there have been some significant bounces along the way. The stock has seen Morgan Stanely raise its target price to $1.10 and Goldman Sachs cut it to $1.39 with strength emerging as the EU considers sanctions towards Russia. Importantly, China is the largest Alumina consumer taking ~40% of supply so any successful stimulus should help AWC maintain its recent strength. However, in our opinion, this is now a trading stock and after its recent surge, we are adopting a neutral stance.
- We can see AWC edging up towards $1.20, but after bouncing ~70%, the risk/return has diminished significantly.
MM is neutral toward AWC, around $1.10
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