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Allegheny (ATI) & BEST Ink Deal to Advance Superconductors

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Allegheny Technologies Incorporated (ATI - Free Report) and Bruker Energy & Supercon Technologies (“BEST’’), a fully-owned subsidiary of Bruker Corporation, have landed a technology development agreement to advance state-of-the-art niobium-based superconductors. These include those used in magnetic resonance imaging (MRI) magnets for medical industry and preclinical MRI magnets used in the life-science tools industry.

The agreement extends the companies’ expertise to develop high-performance niobium-based alloys, and apply them in efficient and improved superconductors. MRI magnets are expected to deliver higher performance and lower cost of ownership though these superconductors. The resulting products will have usages in scientific instrumentation, medical imaging, particle physics research and fusion experiments.

Under the agreement, the advancement in manufacturing and metrology processes and highly differentiated superconductors is expected to deliver better performance, aiming to give healthcare providers better diagnostics to improve lives. The fully integrated supply chain will allow for process innovation to further boost efficiency as well as quality and supply chain security for demanding customers.

Shares of Allegheny have lost 3% in the past three months compared with the industry’s fall of 15.2%.



Allegheny, in its third-quarter earnings call, stated that it expects year-over-year growth in operating margin and revenues at the High Performance Materials & Components (HPMC) division in the fourth quarter of 2018 owing to improved asset utilization and higher aerospace market demand.

At the Flat-Rolled Products (FRP) segment, the company expects a significant price fall in major raw materials to lead to weaker fourth-quarter results due to mismatch between input costs and the surcharge index pricing mechanism. Meanwhile, U.S. operations are forecast to be profitable in the fourth quarter. The company also continues to expect year-over-year improvement in operating margin of 150-300 basis points in 2018 driven by strong end-market demand, benefits from HRPF utilization and strong growth of differentiated product sales.

Allegheny Technologies Incorporated Price and Consensus

 

Zacks Rank & Stocks to Consider

Allegheny currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , The Mosaic Company (MOS - Free Report) and Methanex Corporation (MEOH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained 20.9% in the past year.

Mosaic has an expected long-term earnings growth rate of 7%. The stock has rallied 48.5% in a year’s time.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 9.7% in the past year.

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