Arconic (ARNC), mcap=$2.2bn, price $21.13 vs $29.15

$ARNC pitch:
– Manufacturer/supplier of rolled aluminum products for industrial uses.
– Undervalued relative to peers.
– Favorable growth tailwinds with healthy demand for aluminum rolled products at all ARNC’s end markets.
– Due to execute a few 25-35% IRR projects.
– The company expects to grow run-rate EBITDA by 40%+ over the next 3 years.

$ARNC valuation:
– Trades at 5x ’23 EBITDA (consensus) with little leverage.
– Peer group is at ~6.5x ’23 EBITDA with x higher leverage.
– Well, protected downside at a currently low valuation.

Exp. gain: +45% to $42/share (DCF model).

Full ARNC write-up (free guest account required):

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