Alcoa (AA.US): Subsequent resumption of production in the Middle East is expected to be more gradual, and the new production capacity planned before the conflict may be difficult to realize.

Jefferies, a Wall Street financial giant, recently released a research report after meeting with executives from Alcoa (AA.US). The report states that the operational complexity and execution risks of Alcoa in recent years have suppressed its valuation. However, the acquisition by AliGroup, accumulation of cash prior to delivery, progress in mining approvals in Western Australia, and improvements in the cash conversion ability of existing assets are expected to drive valuation recovery. Jefferies maintains a slightly positive stance on aluminum prices and a relatively neutral position on alumina. The firm reiterates its “Buy” rating for Alcoa and assigns a target price of $60, implying an upside potential of 53.1% compared to last Friday’s closing price of $39.19 as indicated in the research report.