UPDATE: Tigress Financial Upgrades Alcoa

Following Alcoa Inc's (NYSE: AA) third quarter report on Wednesday, analysts at Tigress Financial upgraded shares to Strong Buy from Buy while adding the company's name to its "Focus List."

"Alcoa's third quarter solid quarterly results confirmed our belief that Alcoa's transition to higher value-added businesses will continue to drive increasing Economic Profit and greater shareholder value," analyst Philip Van Deusen wrote in a note to clients on Friday. "We believe Alcoa's performance will also be bolstered by strong long-term trends in global air travel and light-weighting in the automotive industry, which is in its infancy."

Related Link: Alcoa Inc Q1 Conference Call Highlights

Alcoa's Engineered Products and Solutions delivered "strong results" with a $209 million after-tax operating income. Van Deusen notes that Alcoa continues to heavily invest in the division with its acquisition of Firth Rixson, a specialty metal fabrication company with strong exposure to jet engine components. The analyst believes that the acquisition is "highly strategic" as it will give Alcoa a higher share of the supply chain for commercial airlines.

Van Deusen believes that the use of aluminium sheets in vehicles will "be one of the most important trends" within the automotive sector. To meet the expected surge in demand, Alcoa's Davenport facility is ramping up production to meet current and future demand. Alcoa also plans to open a second facility in Tennessee in mid-2015.

Finally, Van Deusen is optimistic over the price of aluminium remaining "firm" with a "balanced supply and demand" at the sector-wide level.