Goldman raises 6-month price target on Alcoa shares

Sept 22 (Reuters) - Goldman Sachs raised its six-month price target on shares of aluminum producer Alcoa Inc, citing a higher price forecast for the metal due to improving macroeconomic data. Analysts led by Sal Tharani, who narrowed their third- and fourth-quarter loss views for the company, said world aluminum demand could rise 6 percent in the second half of 2009 and 9 percent in 2010. "China is the main driver of our aluminum demand revisions as we now expect demand to rise 6.5 percent in 2009 versus 2008 on the back of infrastructure spending and strong GDP growth," the analysts wrote in a note to clients. However, the extreme excess supply of aluminum keeps the price forecast below consensus and the futures curve, and about flat with current levels, said the analysts, who raised their six-month price target on Alcoa to $16 from $13. "In contrast to aluminum where we see challenging, structural issues, we believe that copper is the best positioned among base metals as sharp demand increases, coupled with constrained supply, will manifest in sharp commodity price upside," they added. The analysts said they prefer "conviction buy"-rated Freeport-McMoRan Copper & Gold Inc over "neutral"-rated Alcoa. The analysts narrowed their third-quarter loss forecast for Alcoa to 10 cents a share from 16 cents a share. They expect the company to post a loss of 2 cents a share in the fourth quarter, compared with its previous estimate of a loss of 9 cents. Shares of Alcoa rose 2 percent to $14.25 Tuesday morning on the New York Stock Exchange. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Anne Pallivathuckal)