Market Overview

JPMorgan Upgrades Arconic After Last Week's Sell-Off

JPMorgan Upgrades Arconic After Last Week's Sell-Off

Although Arconic Inc’s (NYSE: ARNC) shares came under significant pressure last week, due to recession concerns, management’s plan to split the company into Arconic (Rolled Products) and Howmet (Forgings) could unlock shareholder value, according to JPMorgan.

The Analyst

JPMorgan’s Seth Seifman upgraded Arconic from Neutral to Overweight keeping the price target at $30.

The Thesis

Milestones in the company’s planned split could be key catalysts, especially the chosen leadership and the capital structure of both the businesses, Seifman said in the note.

He added that Arconic seems to be headed “toward a viable steady state as two companies and with dependable execution, each should see more investor attention.”

Given Arconic’s exposure to the auto, commercial transport, construction and general industrial end markets, the company would suffer in a recession, the analyst noted. He added, however, that aero exposure should support Howmet, while shortages in the auto sector, due to common alloy tariffs, limits downside at the Rolled Products business.

Although exposure to commercial transport could be a source of concern, this segment contributes less than 20% of Howmet’s sales, Seifman said. He further noted that a low double-digit decline in sales would impact Howmet’s EBITDA by only around 3% and that “sales to support the existing truck fleet mitigate the impact of new builds.”

Price Action

Shares of Arconic had risen a little over 169% to $24.88 at the time of publishing on Monday.

Related Links:

Benzinga's Top Upgrades, Downgrades For October 7, 2019

Barron's Picks And Pans: Arconic, Facebook, iHeartMedia And More

Latest Ratings for ARNC

Oct 2019MaintainsOutperform
Oct 2019UpgradesMarket PerformOutperform
Oct 2019MaintainsEqual-Weight

View More Analyst Ratings for ARNC
View the Latest Analyst Ratings

Posted-In: JPMorgan Seth SeifmanAnalyst Color Upgrades Analyst Ratings Best of Benzinga


Related Articles (ARNC)

View Comments and Join the Discussion!

Latest Ratings

TORCCantor FitzgeraldDowngrades3.0
CIDMCanaccord GenuityMaintains1.5
TDGCanaccord GenuityMaintains620.0
DLPNCanaccord GenuityMaintains1.6
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Driver Shortage Tops Trucking Industry's Challenges For Third Consecutive Year

This Week's Forecast October 7-11