Analyst Gautam Khanna also increased the stock's price target to $31 from $26.
"The firm's rising FCF renders its low valuation on EV/EBITDA, which was rooted in the firm's historically poor FCF/EBITDA, an artifact that no longer should apply," the analyst said in an Oct. 14 note.
Khanna also wrote that "upside above our $31 PT is not a given, and will depend on whether operational gains & lower capex endure."
Arconic shares were last trading up 1.6%, or 43 cents, to $26.88. The stock is up about 26% over the past year.
Arconic, a lightweight metals manufacturer, has seven buys, five holds and one sell rating with an average $28 price target, according to Bloomberg.