Alcoa (AA) Stock Gets ‘Buy’ Rating at BofA/Merrill Lynch

NEW YORK (TheStreet) -- Shares of Alcoa (AA) - Get Report are rising 0.88% to $9.19 in early morning trading on Monday after the lightweight metals manufacturer's stock rating was raised to "buy" from "neutral" at Bank of America/Merrill Lynch. The firm also increased its price target to $11 from $10.50 for the New York City-based company.

Alcoa's exposure to the aerospace industry continues to rise with about a third of its aerospace products being made for engines, BofA/Merrill Lynch analysts wrote in a note released before today's market open.

"Airline Monitor forecasted 10% higher engine deliveries in 2016E and 18% in 2017E," analysts explained. "While aero build rate views may prove too optimistic, AA can benefit from greater engine exposure and we think little positive aerospace developments are priced in shares."

Even though the company has boosted its presence in the aerospace industry, Alcoa's stock remains tied to aluminum prices.

"The recent pullback in shares provides a buying opportunity, in our view, and we prefer less commodity plays in our space," analysts concluded.

Alcoa is set to separate its metals, casting and energy units from the engineered products, transportation and construction segments by the end of the year.

Separately, Alcoa has a "hold" rating and a letter grade of C at TheStreet Ratings because of the company's solid financial position, which offsets poor profit margins, weak operating cash flow and generally disappointing stock performance.

You can view the full analysis from the report here: AA

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.