Aluminum miner Alcoa (AA - Get Report) reported higher-than-expected fourth-quarter revenue last month, and since splitting off its manufacturing business in November, analysts and investors have been bullish on the stock.

Despite the stock's 64% rise since October, Alcoa still has plenty of upside left. The company has out-performed industry giants such as Aluminum Corp of China, Rio Tinto and Vale.

Recently, JPMorgan Chase upgraded Alcoa to overweight from neutral and set a price target of $46, a hefty 21.5% premium from about $37.80.

Alcoa is seen as having the ability to weather weakening commodity prices, but JPMorgan Chase expects that aluminum prices have room to climb higher.

The company succeeded in unloading some of its debt off its balance sheet by splitting off engineering entity, Arconic, which absorbed most of Alcoa's consolidated debt.

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Bank of America also upgraded Alcoa to buy and set a similar price target of $45.

However, BofA said that it is skeptical about the long-term sustainability of higher aluminum prices.

Alcoa should be able to pull through and continue its positive run.

Analysts expect stable profits this year, which is the main reason that investors are flocking to the stock.

Alcoa is expected to deliver earnings of $1.42 a share this year. The company is likely to exceed this guidance, and that would only fortify the stock.

With forecast earnings before interest, taxes, depreciation and amortization this year of $2.1 billion to $2.3 billion, the company is well positioned to drive profits on the assumption of 4% growth in global aluminum demand.

Alcoa is also expected to drive free-cash-flow growth this year, which would be an important step in addressing its $1.44 billion debt.

There are great trends behind Alcoa. An aluminum price run, consecutive quarters of sustainable growth and increased global demand should reward investors.


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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.